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Looking for Investment opinions

Discussion in 'Off-Topic Discussion' started by RLHOK, May 26, 2021.

  1. May 26, 2021 at 2:29 PM
    #1
    RLHOK

    RLHOK [OP] Keeper of the smoke.

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    I am looking for some opinions on some investment advice.

    I currently contribute 5% to a 401k, get the full company match. I am paid bi weekly, so my part is $96, company match is $66. Fairly aggressive plan with a 85/15 split. I happy with the firm that is handling the investments for me, no issues.

    What I am now looking at doing is another 2%.

    I have 2 choices,

    1: up my 401k to 7%, its all pre tax as we know and lowers my tax liability and who does not like that. Time to retirement is around 15 years when I hit 70. So the extra 2% working for me tax free can be a plus.

    option 2: Buy company stock at a 15% discount with the 2%

    So the 2% equals about $35 a pay check. The stock purchase plan opens and closes twice a year. You sign up in june for the july - december plan.
    You deposit the money direct from your check into a account, at the end of the 6 month plan stock is purchased for you at a 15% discount, you can then cash it in for a 15% profit, but you pay capital gains tax, or you can keep it and hold it.

    Now part of my 401k investment has company stock in the portfolio but its not at a discount.

    For those in the know which would you do and why?

    Thanks in advance.
     
  2. May 26, 2021 at 2:32 PM
    #2
    Safar85

    Safar85 New Member

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    More than a few.....
    Roth IRA, very few drawbacks.
     
    NewImprovedRon, Booney, eick and 2 others like this.
  3. May 26, 2021 at 2:34 PM
    #3
    memario1214

    memario1214 Hotshot Offroad Staff Member Vendor

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    What if I told you to do neither of those things and instead open a Roth IRA to capture the lower taxes we are facing right now while building up a tax-free bucket for the future?
     
  4. May 26, 2021 at 2:45 PM
    #4
    ColoradoTJ

    ColoradoTJ O'Keefe Music Foundation Staff Member

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    Home Depot stock is high right now. 2013 ~50.00 a share. Today 317.00.

    Can’t go wrong with a Roth (depending on who is managing it).
     
    Black Wolf likes this.
  5. May 26, 2021 at 3:04 PM
    #5
    Wallygator

    Wallygator New Member

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    Ethereum.....or Roth IRA or just up your contribution to 7%. Have done this with every raise for several years and up to 15% contribution now. Also max contribution to a Roth every year. The Roth does not lower my taxes. Upping your 401K contribution does
     
    TruckyTruck likes this.
  6. May 26, 2021 at 3:05 PM
    #6
    French Avocado

    French Avocado Double Entundra

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    My best investment advice:
    1 - Roth IRA
    2 - Tundras.com is a fabulous source for advice on investing in Tundras
    3 - Find a better source for retirement investment advice
     
  7. May 26, 2021 at 3:11 PM
    #7
    eick

    eick New Member

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    The answer is almost always Roth IRA if you are under the income limits

    It also can double as your rainy day fund because you can pull out contributions whenever you want. Better to have both but get your max 6k a year in to the Roth
     
  8. May 26, 2021 at 3:21 PM
    #8
    Safar85

    Safar85 New Member

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    More than a few.....
    Seriously, guys who drop 10k plus on mods should not give financial advice lol
     
  9. May 26, 2021 at 3:26 PM
    #9
    eick

    eick New Member

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    Only after contributing enough to get full company match though! Otherwise it would be 15k in mods already
     
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  10. May 26, 2021 at 4:38 PM
    #10
    RLHOK

    RLHOK [OP] Keeper of the smoke.

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    No longer rolling stock baby....
    Well I got some opinions alright LOL...

    You folks are a riot.

    also have costs me a lot of money in mods
     
  11. May 26, 2021 at 5:04 PM
    #11
    omgboost

    omgboost The Accountant

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    You can do a backdoor Roth IRA if you are over the income limits.

    As for Roth, it is a good plan, but also depends on things like how much income he expects to get while in retirement vs the tax bracket he is in now.
     
    Last edited: May 26, 2021
    Terndrerrr and Sunnier like this.
  12. May 26, 2021 at 5:32 PM
    #12
    Njmike13

    Njmike13 New Member

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    Ugh, I need to learn about this stuff on my own. Been meaning to invest some money that's not gaining any intrest in savings. My problem is finding a financial adviser I trust.

    Had a neighbor loose just about everything including their house thanks to Bernie Madoff.
     
    RLHOK [OP] likes this.
  13. May 26, 2021 at 5:32 PM
    #13
    RLHOK

    RLHOK [OP] Keeper of the smoke.

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    No longer rolling stock baby....

    Couple guys at work use the ESPP as a rainy day fund, there if they need it if not they just let the stock sit.
     
  14. May 26, 2021 at 5:37 PM
    #14
    RLHOK

    RLHOK [OP] Keeper of the smoke.

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    No longer rolling stock baby....

    Yup been down that road with my previous employer and a investment company I dispise to this day.

    Current employer has got us access to what seem to be a decent company that will manage our accounts if we want. I spent several hours on the phones with these folks before deciding to sign up.

    When I was asked what my reservations and or hesitations were with the program, I went into detail for about an hour about my previous experience, when finished I was told ya I would be cautious as well after all that.
     
    Njmike13 likes this.
  15. May 26, 2021 at 5:45 PM
    #15
    omgboost

    omgboost The Accountant

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    You don't really need to hire a financial advisor. You can do it yourself. I always recommend buying a fund or ETF that tracks an index, like the S&P 500 or NASDAQ, and let it sit. It is very hard to beat the overall market when trying to buy and sell individual stocks.
     
  16. May 26, 2021 at 5:48 PM
    #16
    Sunnier

    Sunnier “DO it!”

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    Yup. Warren Buffet suggests the same. Very few are really good at timing the market.
     
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  17. May 26, 2021 at 5:51 PM
    #17
    omgboost

    omgboost The Accountant

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    I did that with my previous employer. Made some good money but when I went to calculate my return, it was only 4% a year. That was including company match and dividends. A bit disappointing but like you said, it was there as a rainy day fund. You'll have to see the stock price of your employer and weigh any risks.
     
  18. May 26, 2021 at 5:59 PM
    #18
    TruckyTruck

    TruckyTruck Dumbest Username

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    Ok great, so a Roth IRA is basically a tax code telling you as long as you are 59 1/2, you can withdraw profits tax and penalty free. Anything you invest in a Roth IRA, your contributions, can be withdrawn at anytime tax and penalty free. If you withdraw profits before 59 1/2 you will pay tax and a 10% penalty.

    So again, great, there is your info on a Roth IRA. But the tricky part is what you actually invest in within your Roth IRA.

    Right now, stocks are in my opinion, in a giant bubble. Will they go higher? Quite possibly, due to the fed printing and buying up assets like crazy. The devaluation of the dollar means corporations that have all of this easy money know that if they hold cash, it’s just getting more and more worthless. So they are investing in the market as well.

    I believe all of this is going to lead to a melt UP! In other words, the stock market will climb sky high very quickly right before it craters. I think this crash could be epic.

    All of this is my opinion and from my own research, so if you don’t agree, that’s completely fine.

    So what should you invest in? Gov securities? Lol, I am definitely not doing that.

    There are alternatives though. Precious metals will have value if the dollar craters or we become the next third world country. And honestly people, you should probably do your homework on crypto currency’s.

    If you really think the shat will hit the fan, bullets and other commodities could be a good idea.

    Pretty depressing rant huh? Well I guess it’s all how you look at it. We are heading towards something that most of us have never seen with our economy and if you can get on the right side of it, you might just do well.

    I’m not giving anyone any advice here. But I will tell you, the dollar is in trouble. Also why the fed is talking about the digital dollar. Who knows what surprises are waiting for us there.

    Also, for the mods, please note nothing I’ve said has anything to do with politics, but everything to do with the current state of investing and our economy!

    I will say this about precious metals and certain cryptos like Bitcoin. They have a finite amount. So usually if something can’t just be printed or created out of thin air, that something will usually hold or gain value.

    Good luck! All just some rando’s random opinions! :popcorn:
     
  19. May 26, 2021 at 6:14 PM
    #19
    omgboost

    omgboost The Accountant

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    One cavaet with the Roth IRA, you need to have a Roth account for 5 years before there is that tax and penalty free withdrawal.

    As for what to invest, you can pretty much buy anything. There are volatility indexes which goes up like crazy when the market tanks. You can do real estate funds, international markets, emerging markets, etc. It doesn't have to be the US stock market. But sure, maybe the stock market is in a bubble now and it's about to burst but look at the history of the market. There have been many bubbles and bursts and everytime the market rebounds and keeps reaching a new high.
     
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  20. May 26, 2021 at 6:17 PM
    #20
    TruckyTruck

    TruckyTruck Dumbest Username

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    That is true, but only for a withdrawal of gains. And you have to be 59 1/2. The contributions can be withdrawn at anytime with no penalty or tax. Even if you have just opened the Roth and decide to withdraw what you’ve put in.
     
  21. May 26, 2021 at 6:27 PM
    #21
    GaTundra79

    GaTundra79 New Member

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    I'm with this guy - Roth IRA or tundras.com:rofl:
     
  22. May 26, 2021 at 6:27 PM
    #22
    TruckyTruck

    TruckyTruck Dumbest Username

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    My rant probably didn’t do anything for your questions. I will say, telling you what to do is probably not a good idea. But I could tell you what I would do. I would invest in my company’s stock if I believed in them and completely understood how their business model works and think it’s a good investment. For myself, I only invest in what will be matched by my company in a 401k.

    The idea with a 401k Roth or A Roth IRA is to be able to take all of my earnings when the time comes, tax free! That’s huge. Some say when you retire, you will be in a lower tax bracket and the taxes you pay from a 401k or traditional ira wont be that high, but I see plenty of people all the time that pay through the nose with taxes when they are retired. So why not look at something you won’t have to pay taxes on?

    With company stock, when you decide to sell it or cash in, you have capital gains to deal with... depending on tax laws, that could be pretty high. I wouldn’t discourage you from doing that, but it’s just something to think about.

    You might even think about talking to a tax attorney. They could help you with a strategy there.
     
  23. May 26, 2021 at 6:30 PM
    #23
    TruckyTruck

    TruckyTruck Dumbest Username

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    Yes! I love index funds. Almost nothing in fees.
     
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  24. May 26, 2021 at 7:37 PM
    #24
    LuvTundras

    LuvTundras New Member

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    I too would rather see you put that 2% into a ROTH IRA. I have no doubt you will have better investment options vs your 401k. Understand the eventually your 401k will be subject to RMDs which for some could cause a tax nightmare. As for employer stock...that might be okay only if you have decided that stock is the best of breed in its sector. 15% off should not be the deciding factor. And if you go down that path you need to have a plan to sell some as you continue to buy some as you don't want that holding to become disproportionate to the rest of your investments.
     
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  25. May 26, 2021 at 7:39 PM
    #25
    LuvTundras

    LuvTundras New Member

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    Capital gains taxes...specifically long term capital gains taxes are actually quite friendly. Currently if you AGI is less than about $78k you would pay ZERO. Above that an below about $490k the rate is 15%. For most people that is less than their current marginal tax rate.
     
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  26. May 26, 2021 at 7:50 PM
    #26
    TruckyTruck

    TruckyTruck Dumbest Username

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    I hope it stays friendly...! I was thinking it was more along the lines of 20%, but that’s good to know!
     
  27. May 26, 2021 at 7:50 PM
    #27
    Bakershack

    Bakershack Critical of Noncritical Thinkers

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    While I agree that you ought to have some of your savings go to a Roth, more and more of the top investing gurus are recognizing the value of having a portion of your savings in cryptos. If you don't understand cryptos, you're not alone - most people don't understand them. But cryptos already play a large role in most of our lives, all behind the scenes. And cryptos are not correlated to the movements of other markets, which makes them actually become a stabilizing factor in your portfolio, in spite of the volatility that they are known for. It is easier today to buy cryptos than ever before, and you can even earn interest on the cryptos you own.
     
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  28. May 26, 2021 at 7:53 PM
    #28
    PLC721

    PLC721 New Member

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    Is it acceptable if my dividends pay for 10k in mods?
     
    Last edited: May 26, 2021
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  29. May 26, 2021 at 7:54 PM
    #29
    TruckyTruck

    TruckyTruck Dumbest Username

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    Bitcorn! It’s really amazing that these companies and banks are already using blockchain technology for transactions behind the scene. I read the other day that only 1% of the worlds population owns crypto right now.... you know what that screams!
     
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  30. May 26, 2021 at 7:57 PM
    #30
    TruckyTruck

    TruckyTruck Dumbest Username

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    Pretty soon Theta will be part of all of our lives. Expansion of broadband!
     
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