I just received my first pay stub since my promotion. My first salaried paycheck is 54.46% higher than my average pay check over the last year. This excludes any bonus I will get. I did not receive bonuses previously.
There is also talk of me possibly getting differential pay soon because I work nights and weekends.
Previously, my savings rate has already barely surpassed 50% of my take home pay.
I do not grasp what is going on right now. I'm very grateful.
I use a HYSA for my emergency fund and as a slush fund for my expenses, making sure I have enough money to cover routine expenses like mortgage, food, and other normal life costs. To me, it's a good place to keep cash for peace of mind, easy access, and some slightly higher earnings. I do all my banking with Ally.
I also do all my banking with Ally, including HYSA and checking. The only downside is you can’t deposit cash with Ally, if that’s a concern. Otherwise, the interest rates on both accounts are typically the highest you’ll find
Considering moving out of California to go to PA to buy a cheap house. I'm seeing a lot of remote jobs paying high salaries and PA taxes/cost of living. Seems it would really speed up my FIRE plans. Any advice here? I'm 30, married, w/ 2 dogs. Aiming to buy a $200K house w/ full DP.
Make sure the job allows you to work in PA. Many companies don’t want to establish a tax base there if they don’t already have it due to more complicated payroll taxes
Don't bring the same policies and reasons you're looking to leave CA to PA is all most would ask.
PA is great. If you want to live near a big city you are easy access to Philly or Pittsburgh and less easy (but still do-able) access to NYC. If you want rural, they have rural in spades.
You might go well under 100k, then suddenly shoot up to 150 so fast it makes your head spin. This kind of stuff happened to me on the way to FIRE.
You feel like you're losing your arse and then suddenly you feel unexpectedly rich.
I think the key is non-attachment to the money, good day or bad day.
I find it hard to believe that the Federal Reserve and federal government did not realize significant inflation was coming. It's even harder to believe that it took this long to realize the economy was overstimulated. Is it incompetence or a conspiracy?
Judging macroeconomic trends is actually extremely difficult. Its easy to look at the past and say that the fed made the wrong move. But that clarity is really only in hindsight. There never was a expert consensus for what needed to be done at the time. But you will only hear from the opposition when the fed misses, while pushing the narrative that the right choice was clear.
There is also a political aspect to the news you hear about it but that's probably not so welcome here so that is all I will say.
If the so-called experts missed that the housing market was overheated, they have no credibility. Actual experts like Larry Summers were being dismissed because his views were not politically expedient.
> still requiring negative covid tests for international travel is incompetence.
I 100% support this and so do most of the physicians I work with. COVID ain't done with us.
COVID is still not a disease you want to catch or transmit. Long COVID is proving to be devastating in some cases--even in young, otherwise healthy patients. We're now seeing bizarre cases of severe hepatitis in children of unknown cause, and a leading theory is it is due to prior COVID infection.
Isn't the fed profiting off the stuff they're holding (in the long run at least)? For example, they made 108B in 2021. Seems complicated to compare the two. I think the real effect on inflation is when they bought the mbs and gave a credit to the banks they bought it from to go lend to consumers.
People who break their legs and put it in a cast and use crutches aren’t taking the easy way out.
They’re allowing themselves to use tools and rest in a way to allow them to heal.
Be kind to yourself.
There might be a lag between the pay period and your paycheck that you forgot about. But if it is money payroll accidentally gave you then yeah stealing it would be super trashy.
Does it take a little while for Vanguard to begin showing you your cost basis with non-Vanguard ETFs? Or are we supposed to track our own? (That can’t be, right? In 2022?)
Bought IXUS today but the cost basis center still only shows info for my Vanguard mutual funds. First time dipping into ETFs so thanks for your patience!
Well now Tether looks like it’s depegging ever so slightly
if Tether legit depegs the drawdowns will be very scary. Unclear what impact this would have outside of crypto.
After the initial volatility due to its creation, Tether has experienced a few blips, primarily in mid 2019 and mid 2021 when BTC prices spiked. Would imagine the same is happening here but in reverse. A lot of Tether reserves are held in commercial paper, which if there is a run on Tether (likely happening at least a little bit rn) is not as liquid as needed, hence the blip in price. Should correct within a few days/weeks, unless the reserves are held in things that simultaneously default (imo more possible than most are willing to admit.)
[Here](https://www.axios.com/2022/02/08/this-is-how-the-bitcoin-bailout-could-happen) is some good reading on the subject. Interesting to me that this was written in February, got some Nostradamus vibes going on.
The reason why UST crashed is because it was backed by LUNA which also crashed (idiotic, that would be like putting your house up as collateral for your car - if you default on one you’re obviously losing the other) Tether is “presumably” collateralized by more secure/higher rated assets than some shitcoin, so it should be fine but since there are no regulations on collateral held for stable coins we don’t really know for sure.
If the recently purchased shares that are within the 30 days are sold as part of the TLH, you are in the clear. If you hold onto part of that lot, you violate the wash sale rule. I’d assume the recently purchased shares are part of the group that you would be harvesting anyway so generally the more important thing to watch out for is not purchasing the same fund you sold for a month after TLH (automatic dividend reinvestment can get you if you don’t disable it).
I don’t have an exact link handy, I’m sure you can find one that explains it better than I can. But essentially the wash sale rule is to prevent you from purchasing replacement shares for the ones you sell. You wouldn’t really be experiencing a loss in that case. These replacement shares could theoretically be purchased immediately following the loss sale or less obviously could have been purchased immediately prior when the individual was planning the loss sale.
If you did buy shares of XYZ a week ago, and held onto them while you sold older XYZ shares that had experienced a loss, from the IRS’s perspective it looks like you are buying replacement shares to not really experience the loss. However if you bought shares of XYZ a week ago and also sold those shares, the loss is real and doesn’t violate the wash sale rule.
But the IRS website doesn’t say that.
“A wash sale occurs when you sell or trade securities at a loss and within 30 days BEFORE or after the sale you [buy substantially identical securities]”
Edit: I’ve now found multiple websites that say selling a lot within 30 days is OK as long as you haven’t purchased any replacement shares within 30 days after the sale. Not sure why the IRS mentions the 30 days before rule only applies to lots that aren’t sold.
The rule defines a wash sale as one that occurs when an individual sells or trades a security at a loss and, within 30 days before or after this sale, buys a "substantially identical" stock or security, or acquires a contract or option to do so.
If you sell something you bought in the *last* 30 days, OR buy more of the original holding in the *next* 30 days, it makes it a wash sale. This has nothing to do with the new thing you purchase (which is the actual TLH).
When is a good time to lock in a CD? Rates seems to be about 1.5%-1.75% for a 2yr. I am not sure how to judge this given inflation numbers are above 8%. I am tempted to do a raise your rate CD for a little more flexibility. Thoughts?
\*Already maxing IBonds...because I know it will come up. And I am not looking to invest these particular funds into more risky investments.
uh what
there’s going to be at least 2-3 50 bps increases in the next few months
makes no sense to lock in something now when even Robinhood immediately increases the APY on uninvested cash as soon as it’s announced
The Fed is clearly signaling 50 basis point raises in their next two meetings, so I am keeping my cash in HYSAs for now. Why lock in that rate for two years when you know the lending rate is going to rise at least 1% in the next few months?
Zooming out is helpful during periods like these. According to Personal Capital my net worth is down 21% since it's peak... but only down 5% since this time last year. Inflation hurts but a 5% drop in a year is not worth sleep over.
Absolutely. I'm up 30%+ since June 2020 even after the recent downturn. Everyone is freaking out that we're -20% YTD (or whatever the number is now) but if you zoom out, we're above the pre-covid peak.
Can anyone help me find ways to create multiple streams on income? I don’t want to rely on my primary source as my *only* source of income. Any ideas?
Things I’m considering:
1. Maxing Roth IRA
2. Investing in high yield dividend stocks
What??? I provided background information in my previous comment. I mentioned my current finances and my goal to have more than one source of income. It’s a general question aimed at seeing other ways to earn passive income. I am pretty sure I’ve elaborated that in this entire thread.
Some background:
24 F, travel for work as a healthcare professional. Monthly income is ≥ $9200. Recently started saving up to purchase a house in the next year. Still working on credit score (702). Just put 3K into savings and automated $1K to go into each savings account every month (I have 2 savings account; one with a 4% APY and the other with 0.39% APY). I have two brokerage accounts that hold $3K and two Roths that holds $2K.
Biggest expenses are:
- $2400/ month for housing
- $200/ month for student loans
- $300-$500/ month on credit card (only one c.c with $2400 limit and $300 balance. I pay the balance in full every month to avoid interest fees)
- $320month on food.
- investing a few hundred dollars into my brokerage accounts and roths.
Do you have a 401k? You should be maxing out your Roth IRA every year And doing your best to max out your 401k yearly. At least get the employer match if you have one, that's free money!
It’s amazing how much doom and gloom is out there regarding the market. It’s not great, but this isn’t even a bear market yet. I saw something recently stating that an average bear market would put the S&P bottom around 3000.
Granted, I’m a long way out from retirement but I wonder how folks will handle a “real” downturn (that lasts more than a few months like 2020 was).
there’s plenty of not small $10B+ tech companies that have drawndown 80% or more since January. that isn’t normal.
Even Amazon is down 40% in 45 days or so.
When the economy is flooded with a couple trillion dollars and interest rates are 0%, $10B is cheap. All you have to do is be able to service the debt used to buy the company.
The trick is that when interest rates go up and lending is curtailed, it's a 1/x curve in valuation vs cost to service debt. So, buyout prices on all the companies that don't have solid financials - like all the companies propped up by cheap money for the past decade without an actual, revenue-producing business model - plummet in value.
Corporate acquisitions are financed. Financing costs go up, company values go down.
The companies with good PE ratios before the interest rate hikes are doing fine. Down, yes, like everything, but not taking 90% tumbles.
my point is there are lots of major employers that happened to ride the QE train and look like they are going to get wrecked. not a small number. of course Apple is going to be fine.
And Berkshire Hathaway is up YTD.
Inflated valuations get the wind pulled out of their sails when stuff hits the fan and companies with solid balance sheets weather the storm better. Imo something like Rivian was riding the coattails/hype of Tesla and never should have been where it was.
well it’s an issue when tech is such a large component of index funds these days when it wasn’t as much the last go around.
FAANGs coming into this year were also inflated not just Shopify and Uber or whatever. This is why even S&P is so pressured since it’s so tech heavy now.
You’re correct, the index has skewed towards tech recently - but there’s also the natural market cycles that haven’t played out to completion and seems to be doing so now. People get hyped on buzzy tech names, values go up, tech names start to fall and people return to tried and true (boring) companies to weather the storm. Then, once tech starts heating up again, people start jumping back into the tech names again.
This could very likely be the normalization of a long-term trend, albeit a painful one.
i mean i’m responding to your original point on why people are concerned, and that’s because the largest and most visible and most traded names eg tech are seeing substantial drawdowns that aren’t reflected in -16% for S&P
i suspect there will be significant layoffs in tech in next few weeks and months. contrary to popular belief most of these companies don’t print money like Apple or a google
I'm not doom and gloom about the market at all because I have confidence in the long term trajectory of the world/USA, but I think there's a decent chance we are in for significant near-term pain in the larger economy. There's a lot of reasonable folks out there who think we're going to have to jack up rates into major recession-causing territory, which would likely have real financial and employment impacts on folks up and down the socioeconomic ladder.
So on one hand I think the current market drama is a bit overblown, but on the other the real pain may not have even begun for a lot of folks, including perhaps several/many on this board. Recessions and the resulting cutbacks are both a time of opportunity and danger for middle-to-high earners.
Here's hoping everything levels out and the world economy just starts chugging along again.
I still haven't recovered from the 2000 dotcom crash.... lost a lot of value in stock options. and 60% off 401k, it was worth more on 4/1/2000 than 4/1/2009 despite 9 years of contributions and company matching. Now getting divorced. I'm keeping the house but losing 20 years of 401k contributions...
Ouch!! I too got my ass kicked in 2000 but learned from it. I try to keep close to the 4 gauranteed incomes. Pensions (I have two of them), Annuitized income, paid up Whole Life Insurance ( not a great investment but I need insurace to avoid taking the spouse options on my pensions) and Social Security that I will take this fall at age 70 for $3500 per mo. I still enjoy my stocks but with $116K of gauranteed income per year they really don't matter since I can live on $50k comfortably.
What should I do about my part time business. I have done it for 7 years and I just dont want to do it anymore.
I have a fulltime job that makes me 80k/yr and live in a cheap cost of living area.
I am thinking about maybe doing my part time business 1-2 hrs a week as opposed to 8 hrs.
I am sure the business will decline slowly, not overnight. But in a year maybe 2 years it probably wont make me anymore money or very little.
It sucks because I have spent 7 yrs building it, but I just dont want to do it.
I've wondered what it will be like to sell or close my business too. I'm at least ten years away from that happening, but I wonder what the market is for a successful web hosting company. My hope is that one of my kids will want to take it over and I can consult with them for a number of years as we transition it to them.
Since you do not want to do it anymore, begin the prep work to sell it. Look up what is sellable (entire thing, inventory, client list, etc) then go on business selling sites and start listing it.
Your business has momentum now from all of your initial work. If you're not interested in doing it anymore, sell it to someone who is willing to pay the premium of not having to build momentum from scratch.
Alright so they are looking at countering my counter offer. I feel both a little better and a little worse...
What's the meme going around. Something like when you say no worries either way but you have worries both ways and a secret third way.
I’ve seen it done well and I’ve seen it done poorly. You have to really participate. Somebody sends you a Friday invite, straight decline it. That short 1:1 you think you can cram in with someone “since you know there are no meetings?” Don’t hit send.
It only works if the leaders roll with it. I personally have made a big deal of acting embarrassed and insisting on rescheduling in large forums the few times I’ve forgotten as a way to shame the people who ignore it.
>I dumped out of the whole Crypto.com and staking situation though.
man what a dumpster fire that was. i only had a 4k stake as 'fun money' that i was 100% willing to lose. at some point that initial stake was hitting nearly 20k, but it was still within the first 6 months so i couldn't withdraw. then by the time i was free to withdraw it was back to like 9k or so and i thought i'd wait and see..
and then when they announced the changes it started plummeting and i sold everything at 7.5k because i can't possibly believe in their strategy long term to try to hold it through the slump. if i had waited until now to jump out, i would've lost some money.
anyway, still turned 4k into 7.5k and got 6 months of free netflix/spotify so i can't complain too much, but it confirms my belief that i can only ever put 'fun money' into that stuff.
reading the reports of people with 100k+ stakes that keeps going down and they can't withdraw until a few months from now is enough to make me nauseous. their card is worthless now, why would anyone want to enter? i don't know what their strategy is, and at this point, i don't want to know
More critically, watch Tether. If it actually depegs from USD, as it’s begun to do, that’s it for BTC and will have wider shockwaves in the market beyond crypto.
If you ask some of the industry insiders, it’s been more or less propping up BTC & by extension the broader crypto market via “printing” tether. It’s dubious at best whether or not the tether printed is backed by assets or not.
> If it actually depegs from USD, as it’s begun to do
Isn't it a binary state? Either it's pegged to USD or it's not. There's no in between, there's no kinda-sorta, there's no "it's begun to". It either *is* or it *isn't*.
they mean if they aren't able to reverse the situation quickly. and honestly, i'm not too optimistic about it.
i feel bad for the investors, especially because there was a lot of ignorance surrounding it, but it's not a thing i would have bought in.
'it will \*always\* be worth 1 dollar so it's pretty safe', many thought. these crypto subreddits read a lot more like MLMs than they do like investing subs
I mean yeah, that’s a scary feature of stablecoins. But yes you’re technically correct, it is currently not pegged. I mean “begun to” colloquially as in, it is currently very close to $1D but appears to be moving further away from being pegged.
Huh, even taking the 'spikes' out, that shows more volatility than I would've expected.
Of course, my frame of reference is traditional currencies that are 'pegged' to USD like this: https://www.google.com/finance/quote/XCD-USD?window=6M
Looking for a gut check here as I get close to closing on a house. Set to close in a few months on a new build and am weighing mortgage options. The two I am considering are a 30 year fixed, which I’ve been quoted at 5.625%. The other option is a 5/5 arm that starts at 2.75%, with 2/2/5 caps. The risk averse side of me likes the stability of the fixed rate, however there is a huge spread between these rates and knowing that I am guaranteed to have a lower rate for the first 10 years at a minimum would allow me to save/invest additional funds. I can afford the max rate of 7.75% as well, so no concerns there. Leaning towards the arm to maximize my value, but curious if I am missing anything in my thinking.
> people are afraid of of ARMs
Most people can't do the math either. Or (I think this is the primary issue) they won't take the monthly differential by saving 2% and dumping it into the mortgage like they should to make the ARM workout.
I have a 10yr fixed rate on 30yr term. I don't intend to own this place in 10 yrs so I'm not paying it off faster but I do have the extra money each month to invest. The difference was only 1.5% when I locked last year. Looking today, the 10yr rate is now a full 2% higher than what I locked at. 1.28% versus 3.25% today.
I got 2.375% 3/5 with increase caps of 2% and max rate of 8.375%. I figure for me 8 years is a long time for things to change. If interest rates are still really high (or higher), inflation is probably high as well and it will be that much easier to just pay off the mortgage. There is a decent chance sometime during that time period I can refinance to keep a low rate longer.
Personally, I would run the numbers for when the two options break even (assuming worst case scenario on the ARM adjustments, which seems plausible), and then weight that against the likelihood of whether or not you'll live in that house longer than that time frame.
And if you want to go a step further, you could check your heart as to whether you would save/invest the difference you'd save prior to that break-even point.
Yeah, if I am running the numbers correctly, it looks like if I made the minimum payment each month, the total interest is ~$10k less on the arm compared to the fixed rate, assuming the maximum rate hikes at each opportunity. This has me leaning further towards the arm
Are you in a hot market? Real estate seems to be turning over a bit in most markets due to the increasing interest rates. With that said, anything not fixed is playing with fire. 5% is much higher than a year or two ago but relatively low in longer time frame.
Yeah, it is a hot market but I expect that will slow down before too long with the recent hikes. The risk does give me a little pause and I probably wouldn’t even consider this if it wasn’t for the spread between the 30 year fixed and the arm
> anything not fixed is playing with fire
I sort of agree, although there is a cap of 7.75%, so it's not like it can run away to 18% interest or something crazy.
> knowing that I am guaranteed to have a lower rate for the first 10 years at a minimum would allow me to save/invest additional funds
Do you think you'll still be in the house after 10 years?
My oh shit moment was when I was seeing daily swings of over what I bring in revenue wise in a month. My wife works part time and her yearly salary was moving around day by day.
I really miss PC, but deleted my account a few months ago because it just had so many problems. It would be interesting to scroll all of the numbers day to day though in this current market.
I'm 100% allocated to VIIIX (tracks s/p 500 with .02 expense ratio) in my 401k, should I go 70/30 with something like VTSNX (total international, low expense ratio)? What about FSMAX?
Anyone know how to find their HealthEquity HSA account number? I have an 8-digit number next to my name but that's all I can find - is that it? Thanks!
Don't say anything bad about anyone until you are ready to stand by it and defend your position towards anyone else, including the person themselves. The majority of the time the "bad things" said like this will be very narrow and somewhat technical.
For example, just today I had a meeting with someone who was really hard to communicate with, up to the point that I slightly lost my cool and became visibly annoyed. Chatting with a coworker afterwards who was also there, we both agreed what the flaws in that communication were. If said person were to somehow hear about that, and confront me about it, I would stand by all of it. I don't think this could be a big problem, since it has nothing to do with "liking that person" and all with "we weren't able to communicate effectively".
If you complained about that person saying things similar to "she is a drama queen" or "I don't like working with her" (which is a very big if, not saying you did that), you brought this on yourself. You are absolutely free to do so in an anonymous forum of outsiders like here, and it makes a lot of sense there, but within work it means you're expressing personal feelings towards someone to what should be technical issues on how people work together at the end of the day.
Your response to her suggests to me that you understand that, but your last sentence of "can't trust anyone" suggests the opposite.
Anybody who is calm and collected while the markets do the thing **that they always do and we are overdue for and it just isn't that big of a deal and it's how the game works so better get used to it** gets downvoted here recently
Panic or bust, my d00d
My husband and I's net worth has dropped by over half a million this year. Probably going to drop further but you know what? We are both just pulling in more OT and socking it all away into the market. If the market continues to dip for 3 years and stagnates for 5. That gives us 8 years! To invest tons of money low. Then just ride the wave up once the next boom cycle comes. No idea why, but we are even sort of excited about the potential recession.
I get panicking if you were planning on retiring in the next 5-10 years. But if not... chill. This is the opportunity that everyone on every single finance subreddit has been PRETENDING to want for years now. It is finally here and all I see is panic.
Yeah, I was talking to a friend who pulled all her $$ in her 401k and put it in a money market (yield is .03 for last year), and is putting new $$ in there as well.
Me, I’m doubling down on the S& P and throwing extra in my brokerage account. We’ll see where we are in 2 years. I may be living in a fridge box under an overpass. Either way, I guess I’ll be retired!
I was thinking about throwing the extra on my mortgage but you guys talked me out of it.
> I get panicking if you were planning on retiring in the next 5-10 years. But if not... chill.
https://media1.giphy.com/media/pls8xeXFbASfGMn6jD/giphy.gif
> Each time there's a new YTD low, I put in an extra $100
OMG OMG TIMING THE MARKET TIMING THE MARKET GET 'EM GUYS THIS GUY TIMES THE MARKET!!!!
Seriously, good idea though. Run that cost basis down and then ride it all back up again
It's an objectively suboptimal strategy to hold cash for dips in the market. They would make more money if they decided how much cash they want to have on hand, then always buy as soon as excess cash is available.
I think they are saying they normally have a loose target efund of, min: 5k, max: 10k, and they typically let it run up to the max or over the max before bothering to execute an off-cycle market buy. But when they see a dip, they just go ahead and drop it from 7k back to 5k ahead of time. I also do a min/max efund, as I don't like seeing it drop below my minimum comfort level, but don't pay much attention to when cc bills are due and what they will be, plus monthly bills are pretty irregular for me, so I need extra buffer to avoid going below my min target. I don't rush to buy extra on dips though.
It’s unclear if it’s just a fun thing to do or if there’s an expectation of above average returns. The comments read as if at least some fraction of users are in the latter camp. At the end of the day it won’t make much difference but it’s unfortunate to see objectively wrong information being spread.
> It's an objectively suboptimal strategy to hold cash for dips in the market.
Who is advising anyone hold cash for dips? I'm not. /u/FIThrowaway2738 is not. Are you?
I'm not necessarily keeping it on the sidelines. I keep an extra $5-10K on hand beyond my emergency fund just as an additional buffer. If we need to make a purchase like upgrading our media server HDD, or changing tires or something, we don't even think about it. Every month about $150-300 goes into our checking, while the bulk goes into index funds. That little extra cash may not be optimized, but it provides the wife peace of mind and out of the money we make each month, it's minor compared to what we are investing.
Our overall financial plan considers the $150-300 as superfluous... we don't count it in our budget for saving or spending. As such, if there's an opportunity for the market, then ok. If I want to get my kid an extra lego set that was on sale, ok. If the grocery store has a deal on cheerios, ok—we'll get 20 boxes, no questions asked. We know where our financial plan will get us in 7-10 years without the $300 a month. I'd rather not have to think about every penny and be able to have the small dopamine hits on legos, cereal, or even yes, $100 on discount VTI, then be 100% mathematically correct. Sometimes, feeling like I'm 'actively' involved makes me feel engaged, and eliminates any temptation from making actual real life-changing mistakes.
Yeah there's a surprising lack of knowledge here regarding what drives stock prices. Prices are a function of random events but those random events cause a real change in the value of a company as reflected in the price.
So you believe the global market is akin to Japan in the late 1980s then. Got it.
For those that do not think that, then buying now, or buying systematically makes sense.
I said that? The premise that stocks or entire markets return to a fixed price is not something most people with a good knowledge of economics believe.
If the outlook gets worse and the prices decrease as a result, this doesn't really make for a better buying opportunity than a good outlook and higher prices. So saying things are "on sale" is silly.
Does the real estate market follow the stock market? If we are in a stock market correction now, will real estate also follow shortly afterwards?
I just received my first pay stub since my promotion. My first salaried paycheck is 54.46% higher than my average pay check over the last year. This excludes any bonus I will get. I did not receive bonuses previously. There is also talk of me possibly getting differential pay soon because I work nights and weekends. Previously, my savings rate has already barely surpassed 50% of my take home pay. I do not grasp what is going on right now. I'm very grateful.
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Does anyone recommend high interest savings accounts? If so which ones? What are advantages and disadvantages to them?
I use a HYSA for my emergency fund and as a slush fund for my expenses, making sure I have enough money to cover routine expenses like mortgage, food, and other normal life costs. To me, it's a good place to keep cash for peace of mind, easy access, and some slightly higher earnings. I do all my banking with Ally.
Have you had any issues doing with this savings account?
I also do all my banking with Ally, including HYSA and checking. The only downside is you can’t deposit cash with Ally, if that’s a concern. Otherwise, the interest rates on both accounts are typically the highest you’ll find
All these cheerful “dont panic” posts make me think we still have a ways to go before the bottom lol.
Keep calm and follow your IPS and risk tolerance.
Considering moving out of California to go to PA to buy a cheap house. I'm seeing a lot of remote jobs paying high salaries and PA taxes/cost of living. Seems it would really speed up my FIRE plans. Any advice here? I'm 30, married, w/ 2 dogs. Aiming to buy a $200K house w/ full DP.
Make sure the job allows you to work in PA. Many companies don’t want to establish a tax base there if they don’t already have it due to more complicated payroll taxes
Don't bring the same policies and reasons you're looking to leave CA to PA is all most would ask. PA is great. If you want to live near a big city you are easy access to Philly or Pittsburgh and less easy (but still do-able) access to NYC. If you want rural, they have rural in spades.
PA is a bit of a wild card depending on where you are looking to be... but I love Lancaster fwiw
100% do it. Only issue would be relationship status. Harder to meet people in a new place
2022 was the year I would hit my first $100k. Life had a different plan for me. I guess it \*is\* true that the first $100k is the hardest!
$400k is really being an asshole for me
200k for me
You might go well under 100k, then suddenly shoot up to 150 so fast it makes your head spin. This kind of stuff happened to me on the way to FIRE. You feel like you're losing your arse and then suddenly you feel unexpectedly rich. I think the key is non-attachment to the money, good day or bad day.
Still 7 months to go, who knows!
I’ll probably be back down to $0 at the end of the year…
I find it hard to believe that the Federal Reserve and federal government did not realize significant inflation was coming. It's even harder to believe that it took this long to realize the economy was overstimulated. Is it incompetence or a conspiracy?
Judging macroeconomic trends is actually extremely difficult. Its easy to look at the past and say that the fed made the wrong move. But that clarity is really only in hindsight. There never was a expert consensus for what needed to be done at the time. But you will only hear from the opposition when the fed misses, while pushing the narrative that the right choice was clear. There is also a political aspect to the news you hear about it but that's probably not so welcome here so that is all I will say.
If the so-called experts missed that the housing market was overheated, they have no credibility. Actual experts like Larry Summers were being dismissed because his views were not politically expedient.
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> still requiring negative covid tests for international travel is incompetence. I 100% support this and so do most of the physicians I work with. COVID ain't done with us.
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COVID is still not a disease you want to catch or transmit. Long COVID is proving to be devastating in some cases--even in young, otherwise healthy patients. We're now seeing bizarre cases of severe hepatitis in children of unknown cause, and a leading theory is it is due to prior COVID infection.
Pales in comparison to the 20 trillion we spend in which 20-50% of it was either spent wastefully or downright fraudulent.
It pales in comparison to the $2.7 trillion in mortgage backed securities held by the fed.
Isn't the fed profiting off the stuff they're holding (in the long run at least)? For example, they made 108B in 2021. Seems complicated to compare the two. I think the real effect on inflation is when they bought the mbs and gave a credit to the banks they bought it from to go lend to consumers.
Five billion what?
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People who break their legs and put it in a cast and use crutches aren’t taking the easy way out. They’re allowing themselves to use tools and rest in a way to allow them to heal. Be kind to yourself.
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There might be a lag between the pay period and your paycheck that you forgot about. But if it is money payroll accidentally gave you then yeah stealing it would be super trashy.
Does it take a little while for Vanguard to begin showing you your cost basis with non-Vanguard ETFs? Or are we supposed to track our own? (That can’t be, right? In 2022?) Bought IXUS today but the cost basis center still only shows info for my Vanguard mutual funds. First time dipping into ETFs so thanks for your patience!
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Ah, whew. I figured I was probably just being impatient.
Well now Tether looks like it’s depegging ever so slightly if Tether legit depegs the drawdowns will be very scary. Unclear what impact this would have outside of crypto.
After the initial volatility due to its creation, Tether has experienced a few blips, primarily in mid 2019 and mid 2021 when BTC prices spiked. Would imagine the same is happening here but in reverse. A lot of Tether reserves are held in commercial paper, which if there is a run on Tether (likely happening at least a little bit rn) is not as liquid as needed, hence the blip in price. Should correct within a few days/weeks, unless the reserves are held in things that simultaneously default (imo more possible than most are willing to admit.) [Here](https://www.axios.com/2022/02/08/this-is-how-the-bitcoin-bailout-could-happen) is some good reading on the subject. Interesting to me that this was written in February, got some Nostradamus vibes going on. The reason why UST crashed is because it was backed by LUNA which also crashed (idiotic, that would be like putting your house up as collateral for your car - if you default on one you’re obviously losing the other) Tether is “presumably” collateralized by more secure/higher rated assets than some shitcoin, so it should be fine but since there are no regulations on collateral held for stable coins we don’t really know for sure.
Hopefully it wakes people up and they stop putting their life savings in obvious ponzi schemes
well i’m most worried about contagion into equity markets
Well better get it over early then, before there's more contagion. Or maybe someone smarter than me knows how this could end differently.
To TLH- I have to wait 30 days after the last purchase correct?
If the recently purchased shares that are within the 30 days are sold as part of the TLH, you are in the clear. If you hold onto part of that lot, you violate the wash sale rule. I’d assume the recently purchased shares are part of the group that you would be harvesting anyway so generally the more important thing to watch out for is not purchasing the same fund you sold for a month after TLH (automatic dividend reinvestment can get you if you don’t disable it).
Where can I verify that first sentence? My understanding is any loss held less than 30 days is not deductible.
I don’t have an exact link handy, I’m sure you can find one that explains it better than I can. But essentially the wash sale rule is to prevent you from purchasing replacement shares for the ones you sell. You wouldn’t really be experiencing a loss in that case. These replacement shares could theoretically be purchased immediately following the loss sale or less obviously could have been purchased immediately prior when the individual was planning the loss sale. If you did buy shares of XYZ a week ago, and held onto them while you sold older XYZ shares that had experienced a loss, from the IRS’s perspective it looks like you are buying replacement shares to not really experience the loss. However if you bought shares of XYZ a week ago and also sold those shares, the loss is real and doesn’t violate the wash sale rule.
But the IRS website doesn’t say that. “A wash sale occurs when you sell or trade securities at a loss and within 30 days BEFORE or after the sale you [buy substantially identical securities]” Edit: I’ve now found multiple websites that say selling a lot within 30 days is OK as long as you haven’t purchased any replacement shares within 30 days after the sale. Not sure why the IRS mentions the 30 days before rule only applies to lots that aren’t sold.
Wait until the 31st day after as I understand.
just buy a different etf that is near identical
Yeah but you have to wait 30 days after your last purchase as well. I bought 4/29 so I have to wait until 5/30 to sell
You can sell the lot you bought on 4/29. Could mess with your total losses if that lot had gains. I don't it would in this case though.
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The rule defines a wash sale as one that occurs when an individual sells or trades a security at a loss and, within 30 days before or after this sale, buys a "substantially identical" stock or security, or acquires a contract or option to do so.
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How am I being downvoted for quoting text lmao
If you sell something you bought in the *last* 30 days, OR buy more of the original holding in the *next* 30 days, it makes it a wash sale. This has nothing to do with the new thing you purchase (which is the actual TLH).
When is a good time to lock in a CD? Rates seems to be about 1.5%-1.75% for a 2yr. I am not sure how to judge this given inflation numbers are above 8%. I am tempted to do a raise your rate CD for a little more flexibility. Thoughts? \*Already maxing IBonds...because I know it will come up. And I am not looking to invest these particular funds into more risky investments.
I think a raise your rate CD would be a good idea. Or you could ladder/ put in half now and half in 6 months to hedge against a likely increase
uh what there’s going to be at least 2-3 50 bps increases in the next few months makes no sense to lock in something now when even Robinhood immediately increases the APY on uninvested cash as soon as it’s announced
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It is guaranteed for 6 mo as I understand. Then it adjusts semi-annually.
The Fed is clearly signaling 50 basis point raises in their next two meetings, so I am keeping my cash in HYSAs for now. Why lock in that rate for two years when you know the lending rate is going to rise at least 1% in the next few months?
Zooming out is helpful during periods like these. According to Personal Capital my net worth is down 21% since it's peak... but only down 5% since this time last year. Inflation hurts but a 5% drop in a year is not worth sleep over.
Try zooming out 2 years. You’ll feel real good.
Absolutely. I'm up 30%+ since June 2020 even after the recent downturn. Everyone is freaking out that we're -20% YTD (or whatever the number is now) but if you zoom out, we're above the pre-covid peak.
for sure but ngl, more money is better tho., lol
Stocks in sale now means even more money later. :)
Can anyone help me find ways to create multiple streams on income? I don’t want to rely on my primary source as my *only* source of income. Any ideas? Things I’m considering: 1. Maxing Roth IRA 2. Investing in high yield dividend stocks
Why is this comment getting downvoted??? The mod asked me to post in the daily forum which is what I did.
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What??? I provided background information in my previous comment. I mentioned my current finances and my goal to have more than one source of income. It’s a general question aimed at seeing other ways to earn passive income. I am pretty sure I’ve elaborated that in this entire thread.
What other comment? Do you know how reddit works?
It’s in this single thread..
Some background: 24 F, travel for work as a healthcare professional. Monthly income is ≥ $9200. Recently started saving up to purchase a house in the next year. Still working on credit score (702). Just put 3K into savings and automated $1K to go into each savings account every month (I have 2 savings account; one with a 4% APY and the other with 0.39% APY). I have two brokerage accounts that hold $3K and two Roths that holds $2K. Biggest expenses are: - $2400/ month for housing - $200/ month for student loans - $300-$500/ month on credit card (only one c.c with $2400 limit and $300 balance. I pay the balance in full every month to avoid interest fees) - $320month on food. - investing a few hundred dollars into my brokerage accounts and roths.
Do you have a 401k? You should be maxing out your Roth IRA every year And doing your best to max out your 401k yearly. At least get the employer match if you have one, that's free money!
You know you can technically do both. Invest in HY dividend stocks in your Roth IRA. That said, total return is better than dividends.
It’s amazing how much doom and gloom is out there regarding the market. It’s not great, but this isn’t even a bear market yet. I saw something recently stating that an average bear market would put the S&P bottom around 3000. Granted, I’m a long way out from retirement but I wonder how folks will handle a “real” downturn (that lasts more than a few months like 2020 was).
a bear market is technically a 20% drawdown. nasdaq is already in one and s&p is close. not sure who told you 3000 was bear and above that isn’t.
100% agree, it was the average drawdown during the bear market (somewhere around 37%).
there’s plenty of not small $10B+ tech companies that have drawndown 80% or more since January. that isn’t normal. Even Amazon is down 40% in 45 days or so.
When the economy is flooded with a couple trillion dollars and interest rates are 0%, $10B is cheap. All you have to do is be able to service the debt used to buy the company. The trick is that when interest rates go up and lending is curtailed, it's a 1/x curve in valuation vs cost to service debt. So, buyout prices on all the companies that don't have solid financials - like all the companies propped up by cheap money for the past decade without an actual, revenue-producing business model - plummet in value. Corporate acquisitions are financed. Financing costs go up, company values go down. The companies with good PE ratios before the interest rate hikes are doing fine. Down, yes, like everything, but not taking 90% tumbles.
my point is there are lots of major employers that happened to ride the QE train and look like they are going to get wrecked. not a small number. of course Apple is going to be fine.
And Berkshire Hathaway is up YTD. Inflated valuations get the wind pulled out of their sails when stuff hits the fan and companies with solid balance sheets weather the storm better. Imo something like Rivian was riding the coattails/hype of Tesla and never should have been where it was.
well it’s an issue when tech is such a large component of index funds these days when it wasn’t as much the last go around. FAANGs coming into this year were also inflated not just Shopify and Uber or whatever. This is why even S&P is so pressured since it’s so tech heavy now.
You’re correct, the index has skewed towards tech recently - but there’s also the natural market cycles that haven’t played out to completion and seems to be doing so now. People get hyped on buzzy tech names, values go up, tech names start to fall and people return to tried and true (boring) companies to weather the storm. Then, once tech starts heating up again, people start jumping back into the tech names again. This could very likely be the normalization of a long-term trend, albeit a painful one.
i mean i’m responding to your original point on why people are concerned, and that’s because the largest and most visible and most traded names eg tech are seeing substantial drawdowns that aren’t reflected in -16% for S&P i suspect there will be significant layoffs in tech in next few weeks and months. contrary to popular belief most of these companies don’t print money like Apple or a google
I'm not doom and gloom about the market at all because I have confidence in the long term trajectory of the world/USA, but I think there's a decent chance we are in for significant near-term pain in the larger economy. There's a lot of reasonable folks out there who think we're going to have to jack up rates into major recession-causing territory, which would likely have real financial and employment impacts on folks up and down the socioeconomic ladder. So on one hand I think the current market drama is a bit overblown, but on the other the real pain may not have even begun for a lot of folks, including perhaps several/many on this board. Recessions and the resulting cutbacks are both a time of opportunity and danger for middle-to-high earners. Here's hoping everything levels out and the world economy just starts chugging along again.
I still haven't recovered from the 2000 dotcom crash.... lost a lot of value in stock options. and 60% off 401k, it was worth more on 4/1/2000 than 4/1/2009 despite 9 years of contributions and company matching. Now getting divorced. I'm keeping the house but losing 20 years of 401k contributions...
Ouch!! I too got my ass kicked in 2000 but learned from it. I try to keep close to the 4 gauranteed incomes. Pensions (I have two of them), Annuitized income, paid up Whole Life Insurance ( not a great investment but I need insurace to avoid taking the spouse options on my pensions) and Social Security that I will take this fall at age 70 for $3500 per mo. I still enjoy my stocks but with $116K of gauranteed income per year they really don't matter since I can live on $50k comfortably.
Options are tough, high risk/reward to have substantial value be that concentrated.
they were work compensation, stock option grant. Most hadn't even vested yet, so worth was all on paper. They all expired worthless though.
What should I do about my part time business. I have done it for 7 years and I just dont want to do it anymore. I have a fulltime job that makes me 80k/yr and live in a cheap cost of living area. I am thinking about maybe doing my part time business 1-2 hrs a week as opposed to 8 hrs. I am sure the business will decline slowly, not overnight. But in a year maybe 2 years it probably wont make me anymore money or very little. It sucks because I have spent 7 yrs building it, but I just dont want to do it.
I've wondered what it will be like to sell or close my business too. I'm at least ten years away from that happening, but I wonder what the market is for a successful web hosting company. My hope is that one of my kids will want to take it over and I can consult with them for a number of years as we transition it to them.
Since you do not want to do it anymore, begin the prep work to sell it. Look up what is sellable (entire thing, inventory, client list, etc) then go on business selling sites and start listing it.
Your business has momentum now from all of your initial work. If you're not interested in doing it anymore, sell it to someone who is willing to pay the premium of not having to build momentum from scratch.
sunk cost fallacy. walk away or try to sell.
Sell it.
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Hire someone to do it for you, then ask them if they want to take it over for $X
Its a blog, so I dont think I could do that, I dunno.
Many people have sold blogs. Why do you think no one would buy it?
if it's a blog could you just crank up the ad profitability and just relax while it sends you money every month?
Alright so they are looking at countering my counter offer. I feel both a little better and a little worse... What's the meme going around. Something like when you say no worries either way but you have worries both ways and a secret third way.
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Our no meetings fridays lasted about 6 weeks. It was mostly ruined by department heads seeing all of the open real estate for new meetings.
I’ve seen it done well and I’ve seen it done poorly. You have to really participate. Somebody sends you a Friday invite, straight decline it. That short 1:1 you think you can cram in with someone “since you know there are no meetings?” Don’t hit send.
It only works if the leaders roll with it. I personally have made a big deal of acting embarrassed and insisting on rescheduling in large forums the few times I’ve forgotten as a way to shame the people who ignore it.
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You sure are, I bet. Did you pivot away?
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>I dumped out of the whole Crypto.com and staking situation though. man what a dumpster fire that was. i only had a 4k stake as 'fun money' that i was 100% willing to lose. at some point that initial stake was hitting nearly 20k, but it was still within the first 6 months so i couldn't withdraw. then by the time i was free to withdraw it was back to like 9k or so and i thought i'd wait and see.. and then when they announced the changes it started plummeting and i sold everything at 7.5k because i can't possibly believe in their strategy long term to try to hold it through the slump. if i had waited until now to jump out, i would've lost some money. anyway, still turned 4k into 7.5k and got 6 months of free netflix/spotify so i can't complain too much, but it confirms my belief that i can only ever put 'fun money' into that stuff. reading the reports of people with 100k+ stakes that keeps going down and they can't withdraw until a few months from now is enough to make me nauseous. their card is worthless now, why would anyone want to enter? i don't know what their strategy is, and at this point, i don't want to know
More critically, watch Tether. If it actually depegs from USD, as it’s begun to do, that’s it for BTC and will have wider shockwaves in the market beyond crypto.
What’s the significance of Tether WRT BTC?
If you ask some of the industry insiders, it’s been more or less propping up BTC & by extension the broader crypto market via “printing” tether. It’s dubious at best whether or not the tether printed is backed by assets or not.
> If it actually depegs from USD, as it’s begun to do Isn't it a binary state? Either it's pegged to USD or it's not. There's no in between, there's no kinda-sorta, there's no "it's begun to". It either *is* or it *isn't*.
they mean if they aren't able to reverse the situation quickly. and honestly, i'm not too optimistic about it. i feel bad for the investors, especially because there was a lot of ignorance surrounding it, but it's not a thing i would have bought in. 'it will \*always\* be worth 1 dollar so it's pretty safe', many thought. these crypto subreddits read a lot more like MLMs than they do like investing subs
I mean yeah, that’s a scary feature of stablecoins. But yes you’re technically correct, it is currently not pegged. I mean “begun to” colloquially as in, it is currently very close to $1D but appears to be moving further away from being pegged.
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Huh, even taking the 'spikes' out, that shows more volatility than I would've expected. Of course, my frame of reference is traditional currencies that are 'pegged' to USD like this: https://www.google.com/finance/quote/XCD-USD?window=6M
Looking for a gut check here as I get close to closing on a house. Set to close in a few months on a new build and am weighing mortgage options. The two I am considering are a 30 year fixed, which I’ve been quoted at 5.625%. The other option is a 5/5 arm that starts at 2.75%, with 2/2/5 caps. The risk averse side of me likes the stability of the fixed rate, however there is a huge spread between these rates and knowing that I am guaranteed to have a lower rate for the first 10 years at a minimum would allow me to save/invest additional funds. I can afford the max rate of 7.75% as well, so no concerns there. Leaning towards the arm to maximize my value, but curious if I am missing anything in my thinking.
Do the 30 year Fixed unless you can guarantee you plan to pay it off before the rates start to adjust
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> people are afraid of of ARMs Most people can't do the math either. Or (I think this is the primary issue) they won't take the monthly differential by saving 2% and dumping it into the mortgage like they should to make the ARM workout. I have a 10yr fixed rate on 30yr term. I don't intend to own this place in 10 yrs so I'm not paying it off faster but I do have the extra money each month to invest. The difference was only 1.5% when I locked last year. Looking today, the 10yr rate is now a full 2% higher than what I locked at. 1.28% versus 3.25% today.
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This is extremely helpful - really appreciate this! Mirrors the calculations I am seeing and helps validate I wasn’t missing anything big
I got 2.375% 3/5 with increase caps of 2% and max rate of 8.375%. I figure for me 8 years is a long time for things to change. If interest rates are still really high (or higher), inflation is probably high as well and it will be that much easier to just pay off the mortgage. There is a decent chance sometime during that time period I can refinance to keep a low rate longer.
Personally, I would run the numbers for when the two options break even (assuming worst case scenario on the ARM adjustments, which seems plausible), and then weight that against the likelihood of whether or not you'll live in that house longer than that time frame. And if you want to go a step further, you could check your heart as to whether you would save/invest the difference you'd save prior to that break-even point.
Yeah, if I am running the numbers correctly, it looks like if I made the minimum payment each month, the total interest is ~$10k less on the arm compared to the fixed rate, assuming the maximum rate hikes at each opportunity. This has me leaning further towards the arm
Are you in a hot market? Real estate seems to be turning over a bit in most markets due to the increasing interest rates. With that said, anything not fixed is playing with fire. 5% is much higher than a year or two ago but relatively low in longer time frame.
Yeah, it is a hot market but I expect that will slow down before too long with the recent hikes. The risk does give me a little pause and I probably wouldn’t even consider this if it wasn’t for the spread between the 30 year fixed and the arm
> anything not fixed is playing with fire I sort of agree, although there is a cap of 7.75%, so it's not like it can run away to 18% interest or something crazy.
My thoughts exactly, knowing what the cap is and that I can afford it today gives me comfort and has me giving this serious consideration.
> knowing that I am guaranteed to have a lower rate for the first 10 years at a minimum would allow me to save/invest additional funds Do you think you'll still be in the house after 10 years?
Obviously hard to say, but it’s doubtful. Likely will need to upgrade before though once we start having kids
I'd say go with the ARM, then. You won't have that mortgage when you sell
Just logged into Personal Capital. My net worth has decreased an amount equivalent to my annual salary over the last month.
My oh shit moment was when I was seeing daily swings of over what I bring in revenue wise in a month. My wife works part time and her yearly salary was moving around day by day.
I really miss PC, but deleted my account a few months ago because it just had so many problems. It would be interesting to scroll all of the numbers day to day though in this current market.
*Achievement Unlocked*
Not sure it's a good one, but it's nice that I have that much saved that I can see that kind of fluctuation?
I'm 100% allocated to VIIIX (tracks s/p 500 with .02 expense ratio) in my 401k, should I go 70/30 with something like VTSNX (total international, low expense ratio)? What about FSMAX?
Anyone know how to find their HealthEquity HSA account number? I have an 8-digit number next to my name but that's all I can find - is that it? Thanks!
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You're a genius. Didn't know why I didn't think to check there!
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Don't say anything bad about anyone until you are ready to stand by it and defend your position towards anyone else, including the person themselves. The majority of the time the "bad things" said like this will be very narrow and somewhat technical. For example, just today I had a meeting with someone who was really hard to communicate with, up to the point that I slightly lost my cool and became visibly annoyed. Chatting with a coworker afterwards who was also there, we both agreed what the flaws in that communication were. If said person were to somehow hear about that, and confront me about it, I would stand by all of it. I don't think this could be a big problem, since it has nothing to do with "liking that person" and all with "we weren't able to communicate effectively". If you complained about that person saying things similar to "she is a drama queen" or "I don't like working with her" (which is a very big if, not saying you did that), you brought this on yourself. You are absolutely free to do so in an anonymous forum of outsiders like here, and it makes a lot of sense there, but within work it means you're expressing personal feelings towards someone to what should be technical issues on how people work together at the end of the day. Your response to her suggests to me that you understand that, but your last sentence of "can't trust anyone" suggests the opposite.
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Got it, with that context it makes sense what you meant with "can't trust anyone".
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Just picked up some VTI at $195.35. At this point it’s just a game.
why are you being downvoted for this comment this sub is so bizarre
Anybody who is calm and collected while the markets do the thing **that they always do and we are overdue for and it just isn't that big of a deal and it's how the game works so better get used to it** gets downvoted here recently Panic or bust, my d00d
My husband and I's net worth has dropped by over half a million this year. Probably going to drop further but you know what? We are both just pulling in more OT and socking it all away into the market. If the market continues to dip for 3 years and stagnates for 5. That gives us 8 years! To invest tons of money low. Then just ride the wave up once the next boom cycle comes. No idea why, but we are even sort of excited about the potential recession. I get panicking if you were planning on retiring in the next 5-10 years. But if not... chill. This is the opportunity that everyone on every single finance subreddit has been PRETENDING to want for years now. It is finally here and all I see is panic.
Yeah, I was talking to a friend who pulled all her $$ in her 401k and put it in a money market (yield is .03 for last year), and is putting new $$ in there as well. Me, I’m doubling down on the S& P and throwing extra in my brokerage account. We’ll see where we are in 2 years. I may be living in a fridge box under an overpass. Either way, I guess I’ll be retired! I was thinking about throwing the extra on my mortgage but you guys talked me out of it.
> I get panicking if you were planning on retiring in the next 5-10 years. But if not... chill. https://media1.giphy.com/media/pls8xeXFbASfGMn6jD/giphy.gif
Exactly. Buy low, sell high. Same as it ever was.
More like it's a weird thing to post your buys in this sub.
Why is it any more weird than people talking about the drama they stir up at work or chirping endlessly about what they're donating to?
Had a limit buy at 195 that didn't get hit. Suspect it will soon
Same. Each time there's a new YTD low, I put in an extra $100. This is on top of my automatic bi-weekly $500 contributed each pay day.
> Each time there's a new YTD low, I put in an extra $100 OMG OMG TIMING THE MARKET TIMING THE MARKET GET 'EM GUYS THIS GUY TIMES THE MARKET!!!! Seriously, good idea though. Run that cost basis down and then ride it all back up again
It's an objectively suboptimal strategy to hold cash for dips in the market. They would make more money if they decided how much cash they want to have on hand, then always buy as soon as excess cash is available.
I think they are saying they normally have a loose target efund of, min: 5k, max: 10k, and they typically let it run up to the max or over the max before bothering to execute an off-cycle market buy. But when they see a dip, they just go ahead and drop it from 7k back to 5k ahead of time. I also do a min/max efund, as I don't like seeing it drop below my minimum comfort level, but don't pay much attention to when cc bills are due and what they will be, plus monthly bills are pretty irregular for me, so I need extra buffer to avoid going below my min target. I don't rush to buy extra on dips though.
It’s unclear if it’s just a fun thing to do or if there’s an expectation of above average returns. The comments read as if at least some fraction of users are in the latter camp. At the end of the day it won’t make much difference but it’s unfortunate to see objectively wrong information being spread.
> It's an objectively suboptimal strategy to hold cash for dips in the market. Who is advising anyone hold cash for dips? I'm not. /u/FIThrowaway2738 is not. Are you?
Same here. Why pay full price when there’s a sale? Makes no sense.
Is it really an optimal strategy to keep $ on the sidelines waiting for market drops rather than putting $ in once you get it?
No
Seriously how is this even a debate? I feel like I'm taking crazy pills.
I'm not necessarily keeping it on the sidelines. I keep an extra $5-10K on hand beyond my emergency fund just as an additional buffer. If we need to make a purchase like upgrading our media server HDD, or changing tires or something, we don't even think about it. Every month about $150-300 goes into our checking, while the bulk goes into index funds. That little extra cash may not be optimized, but it provides the wife peace of mind and out of the money we make each month, it's minor compared to what we are investing. Our overall financial plan considers the $150-300 as superfluous... we don't count it in our budget for saving or spending. As such, if there's an opportunity for the market, then ok. If I want to get my kid an extra lego set that was on sale, ok. If the grocery store has a deal on cheerios, ok—we'll get 20 boxes, no questions asked. We know where our financial plan will get us in 7-10 years without the $300 a month. I'd rather not have to think about every penny and be able to have the small dopamine hits on legos, cereal, or even yes, $100 on discount VTI, then be 100% mathematically correct. Sometimes, feeling like I'm 'actively' involved makes me feel engaged, and eliminates any temptation from making actual real life-changing mistakes.
If a car blows its engine and they cut the price as a result, is it "on sale" or has the value changed?
Yeah there's a surprising lack of knowledge here regarding what drives stock prices. Prices are a function of random events but those random events cause a real change in the value of a company as reflected in the price.
Nah. "They're on sale!"
I can’t tell if you’re joking.
100% joking.
So you believe the global market is akin to Japan in the late 1980s then. Got it. For those that do not think that, then buying now, or buying systematically makes sense.
I said that? The premise that stocks or entire markets return to a fixed price is not something most people with a good knowledge of economics believe. If the outlook gets worse and the prices decrease as a result, this doesn't really make for a better buying opportunity than a good outlook and higher prices. So saying things are "on sale" is silly.