Regarding ETFs...buyer beware. Leveraged and inverse ETFs aren't meant for retail investors.
http://www.sec.gov/investor/pubs/lev...etfs-alert.htm
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Regarding ETFs...buyer beware. Leveraged and inverse ETFs aren't meant for retail investors.
http://www.sec.gov/investor/pubs/lev...etfs-alert.htm
Is there anyone who thought those were a good idea?
This was titled I'm A Genius & So Is Your Broker----Insert Foot Here, I Heart Wall Street. :p
http://iheartwallstreet.com/2011/11/...in-the-mirror/
So how about that Facebook IPO?
Clearly it's an abominable conspiracy to securitize and sell our personal information to the highest bidder while the fat cats devour your privacy rights and insiders roll in the trough.
But it is a conspiracy; the conspirators just don't know it yet.
Yeah but would you take that action??Quote:
Originally Posted by Dreadnaught
Employers now use Facebook posts as readily as they use Credit Scores, to weed out prospective employees. People have been fired for what they've posted on Facebook. Students have been expelled for what they've posted on Facebook. Scholarships have been denied (or retracted) based on what's been posted on Facebook.Quote:
Originally Posted by Dreadnaught
It doesn't have to be a "conspiracy" to be abominable.
Careful what you make as your profile pic, and make it only viewable to friends.. you should be statistically speaking a-okay for the rest of your humanly life.
Update:
Right around I started this thread, I bought a number of stocks. Here's how they have performed for me, on a percentage basis-
Exxon: 3.85%
Kraft: 16%
JPMorgan: -12.65%
WalMart: 16.47%
Interestingly, the things I had the last faith in, performed the best. I got lucky on Kraft. I had no idea they would spin-off into two companies and the street would actually reward this.
Separately, a few weeks after I bought some ConEd and Berkshare Hathaway Class B. ConEd is up 10.23% (not including dividends) and Berkshre is up 6.08%. I also bought a Vanguard Emerging Market Dividend ETF, which is down a whopping 8%.
All of this was me filling-up my first IRA, so the dollar amounts aren't huge. I'm also not breaking down the allocations for each, but it's roughly even for each stock. On the balance, I'm up 3% tax free. Not great, but not terrible.
The real success has been the Vanguard mutual funds I bought around November, mainly the Vanguard Dividend Growth Fund and the Vanguard International Growth Fund. In a demonstration that timing does matter, those are up about 10%.
All of those sorta proves the idea that the best you can hope for is reasonably smart choices and good timing. Buying equities in April for my IRA was bad timing because of the market chaos in August. Buying in November turned out to be good timing. Buying BP in the summer 2010 was really good timing. But finding the right timing is a bit of a fool's errand unless you have a very long time horizon.
Long story short: Overthinking/overtrading will kill you. I only trade anything every 6-8 months, and I think I'm right below the cusp of doing overthinking/overtrading. So I'm going to continue to buy for value and hold.
I can't wait to see how this pans out - this new evolutionary step of human society / the internet I mean. I've been reserving judgement over whether its a bad thing or a good thing. I personally don't use Facebook much - I have an account but I don't have an interest in connecting with people like that and broadcasting all my business. I've seen people put the most idiotic things on facebook....Quote:
Originally Posted by Dreadnaught
As far as the IPO is concerned, my guess is the stock will be immediately over valued compared Facebook's earnings. Investors will be buying based on what they think Facebook will do with its database on hundreds of millions of users in the near to medium term. And if Facebook reaches too far too quick the 'creepy factor' could kick in and spook users elsewhere.
Yeah, there's certainly plenty of hype. But it seems likely that Facebook will operate a bit like some other Internet companies have been when it comes to Wall Street, IE not giving any guidance, having minimal interaction with the Wall Street analyst community, etc. Which at some point could lead to massive price swings and uneven growth (EG what's happened with Amazon and Google's stocks).
It's about time you stopped trading and started investing, and finally see the difference! ;) :up:Quote:
Originally Posted by Dreadnaught
When was I ever really day trading? I've basically never sold anything besides my Baidu stock.
We're in the early stages of hammering out our long-term saving/investing plan, both for ourselves and for any little oompa-loompas we may end up producing. We're looking to expend very little thought, time and energy over the long term :o I think a very great deal of our savings are going to go into various cheap index funds, and the cheapest and best in Sweden right now is an index fund that would cost us 0% in fees and the like, which is huge advantage over a few decades compared to ones that charge even a little bit more.
Still haven't been able to decide on the various financial and practical pros and cons of buying an apartment once we sell this one.
Money for vacations will come from taking a few extra shifts on-call :mad:
The best strategy is to first pay off your home. After that planning becomes relatively easy; first you are used to setting aside a huge chunk of your income, second you will be able to save amounts of money that normal people only can dream of. If your present apartment is paid of by the time you think to sell it, buying a new bigger home will become all that much easier.Quote:
Originally Posted by Aimless
The present apartment is my fiancée's and she bought it with an interest-free loan from her dad. Value's gone up a little but nothing insane :o we're trying to figure out whether or not we should buy another apartment if/when we move :sour:
Holding full ownership of the place where you live dramatically increases the money you can freely dispense of. 'An 'interest-free loan' is still a loan, unless her father doesn't want the money back at all. In which case you should consider selling it and buying a bigger place where you would want to live for a longer time. The house where you live is NEVER an investment, it can be a huge drain on your funds though if you need a loan to pay for it.Quote:
Originally Posted by Aimless
We spend between 10 and 15% of our income both houses combined. That includes everything from taxes, maintenance to cable subscriptions. We save about 30% of our income every year. I have no doubt that the rising retirement age is not going to really influence my plans of retiring at 60 at the latest.
I'd say you probably have a good start. Focus on specific saving goals (e.g. % of gross income) in order to meet a projected nest egg at retirement (taking into account reasonable guesses for inflation, wage increases, and investment return). Make it automatic (e.g. an automatic monthly transfer to a retirement account), and review your progress and allocations on an annual or semi-annual basis. Adjust your contributions as needed; it's generally good to err on the side of caution when determining allocations, though oversaving can mean you needlessly live like a pauper. Take advantage of every tax break you can get (I don't know Swedish tax law, I'm afraid, but talk to friends or a fee-only financial planner to help sort it out).Quote:
Originally Posted by Aimless
I don't know what your specific funds you are looking at, but I would strongly urge you to go for diversity. Index funds tend to be a nice low cost way to follow overall market performance, but make sure you are investing in the right markets. I assume you won't be too tied up in either Swedish equities or the krona - it would be a bad idea to do so given the relatively small size of the market. So I'd suggest at least one developed markets fund (with heavy weighting to US, Western European, and Japanese/Korean/etc. equities) and one developing markets fund (China, India, etc.). Consider a small allocation in a broad based investment-grade bond fund (corporate and sovereign debt) which you can increase as you get older.
Other financial things to think about: Probably not a big deal now if you don't have significant loans, but once you have kids you will want very hefty life insurance. Most people don't have nearly enough to provide replacement income if you or your spouse die, and it can leave surviving family members (especially children) in a very tough position. At the same time you sort this out (presumably once you and the lady start on kids), you will also want to set up wills and whatever tax arrangements are best (trusts?) in the event of an unfortunate event. Again, the legal and tax details should be dealt with by someone in Sweden.
I will have to strongly disagree with Hazir here: while there are advantages to owning a home outright, the finances do not always work out in its favor. It depends on a lot of factors, and there are a number of calculators of varying complexity out there. Things to consider: Tax implications (from either write-offs on mortgage interest, property tax on a home you own, etc.), maintenance/repairs, interest rates, and the opportunity cost of sinking significant savings into a low-yielding, illiquid asset like a home. Depending on the price of homes and the cost of renting a similar home in your desired area (and the availability of either), it may indeed be worth it to buy. Given interest rates (esp. your current zero interest loan!) and opportunity costs, though, it is most likely that paying off the home early is not a particularly wise move. Run the numbers and make an intelligent decision; for some people, the peace of mind of having no debt is worth it, but in reality it often makes sense to leverage your potential earnings when you are younger. I would strongly discourage you from buying a home if you don't intend to stay there for at least a few years - the transaction costs and moving costs eliminate any advantage over renting unless you stay in the same place for a while.
Generally, I'd say you should just discuss the details with the fiance and come up with a realistic plan - and then leave it alone. Some people obsessively tweak and change their retirement planning, and that's just a good way to give you ulcers and potentially cause you to make ill-timed moves in the market. If you just leave it alone except for the occasional check-up, you'll be in much better shape. Good luck!
Yeah, just to expound on a few things brought up-
1) I think low-cost funds are good (EG costs that are decently below*1%). But zero cost? How is that possible? Someone is being paid something, and I'm curious what that really means. Also, sometimes some extra fees are worth it to pursue a long term strategy as long as the fees aren't ridiculous.
2) Not even sure you're really asking for suggestions, but it's hard to suggest anything without knowing much about the housing. But the suggestions as always is to really try hard to not spend too much and see where you may be able to make compromises so you have more monthly cashflow than you think you need. Money is kind. :noob:
I am not surprised Wiggin is disagreeing with me; he's the typical borrow and spend 'economist'.
It's the type of behaviour that keeps people in the US deep in debt well into their retirement. because they have this ridiculous fixation on how to balance income and debt payments. Never seeing that once you take debt out of the equation, the income you have becomes freely dispensable.
If I would have gotten a euro for every time somebody pointed at the deductability of interest payments on a mortgage I would have been a rich man. Everybody Always seems to forget that for every euro/dollar you get back in taxes there are 3 that went to the bank.
I was actually wondering about this, too. Maybe it's not a no-load fund? Whatever; most index funds/ETFs have absurdly low expenses so as to be nearly zero anywaysQuote:
Originally Posted by Dreadnaught
You mean, one with math and stuff on his side?Quote:
Originally Posted by Hazir
You're ignoring opportunity costs. I don't think your plan is bad for everyone, but it depends a lot on how much you as a person value being debt-free. If one is more comfortable with leverage, it can result in much better long-term finances.Quote:
It's the type of behaviour that keeps people in the US deep in debt well into their retirement. because they have this ridiculous fixation on how to balance income and debt payments. Never seeing that once you take debt out of the equation, the income you have becomes freely dispensable.
If I would have gotten a euro for every time somebody pointed at the deductability of interest payments on a mortgage I would have been a rich man. Everybody Always seems to forget that for every euro/dollar you get back in taxes there are 3 that went to the bank.
Hazir, it's not that wiggin is a 'borrow-and-spend economist'...but that the US tax codes favor debt and loans.
It's fairly complicated for people to figure out which is a better "investment"---paying off home loans or taking the income tax deductions. That's why our housing industry boom-and-bust was so devastating to millions of people, and why those tax deductions are heavily debated by congress.
Also, our property taxes are mostly state-driven, so every federal cut can translate into more state property taxes. That doesn't do much for the fixed-incoome retiree who doesn't have a mortgage payment....but still has to pay escalating local and state property taxes.
I am pretty certain Aimless lives in Sweden which as far as I know doesn't even have deductability of interest on mortgages. Property taxes on houses are capped at €750 PER YEAR. Capital gains on the other hand are taxed at 30%.Quote:
Originally Posted by GGT
I don't which math's Wiggin is talking about, but it seems to me that Aimless would be much better off not having payments for his home than with anything else.
Thanks for the input guys :up: esp. the reminder about insurance!
It's likely that he doesn't want it back, and, moreover, she has more assets coming her way. I just prefer to calculate without those assumptions because I'm uncomfortable with large gifts of money which it essentially is :oQuote:
Originally Posted by Hazir
Good advice. I would like to find a financial planner I can trust :mad: while there is small chance of living like a pauper with our combined salaries, loans or no loans, I am summat stumped by the question of exactly how much we should keep easily accessible (for spending, emergencies, great deals, etc).Quote:
Originally Posted by wiggin
A significant portion will initially indeed be invested in aforementioned Swedish index fund, primarily for reasons of simplicity and cost and assorted other advantages that come with signing on with the bank in question. It's historically been a safe, reliable and productive investment though it's probably heading for a bit of a nosedive in the short-term. From there I expect I'll branch out into other markets, starting with whatever cheap and reasonable fund I can find that tracks the S&P 500, and then looking at both our European neighbors and developing markets. I don't think I'll be worrying my bobble-head with questions like whether or not I should exit the market at certain times. If I have money and time left over, I may consider looking at more niched funds or individual stocks, but right now such pursuits would not be worthwhile :cry:Quote:
I don't know what your specific funds you are looking at, but I would strongly urge you to go for diversity. Index funds tend to be a nice low cost way to follow overall market performance, but make sure you are investing in the right markets. I assume you won't be too tied up in either Swedish equities or the krona - it would be a bad idea to do so given the relatively small size of the market. So I'd suggest at least one developed markets fund (with heavy weighting to US, Western European, and Japanese/Korean/etc. equities) and one developing markets fund (China, India, etc.). Consider a small allocation in a broad based investment-grade bond fund (corporate and sovereign debt) which you can increase as you get older.
Overall, I think we're going to be fairly conservative with like >90% of our saving and more gutsy with the remaining <10%. Both of us are as risk-averse as grandparents and, if all goes well, likely to have good incomes anyway. If I want to take large risks with money or just, you know, waste it on iPads, I plan to have it come from taking out comp-time as $$$.
It's almost entirely passively managed and the bank eats the small costs associated with keeping it up-to-date because it's a great way for them to draw clients. They've profiled themselves as being esp. good for investors at all levels and streamlined their business towards that end. Great evaluations from independent observers year after year wrt both their business and their customer-service. Probably the least headache-inducing of all Swedish index funds, esp. now that they automatically reinvest dividends.Quote:
Originally Posted by Dreadnaught
We can indeed deduct interest on mortgages. It's almost the only deduction we're likely to be eligible for in the coming few years apart from one we may get when we sell this apartment :oQuote:
Originally Posted by Hazir
Whether or not it would make sense remains a tricky question. Finding nice and "affordable" apartments with very low monthly costs isn't all that difficult, in the cities we're considering. It's finding a good apartment for rent that's so difficult. Rents are high, often higher than the average monthly cost of fees, interest and amortisation, and those apartments are often just not in places we'd like to live.
Saving for the down-payment is doable. Getting a mortgage at just over 3% isn't likely to be a problem. What puzzles me the most is the question of opportunity costs, notably the one associated with putting money toward a down-payment on an apartment rather than investing it in something more productive (with interest payments and amortization added to that). I'm having a hard time sorting out the numbers and comparing them to the opportunity costs of throwing money at rent instead of investing.
One small but potentially very important advantage to taking out a loan would be if the deductions push me back into a lower tax bracket. At the moment, my base salary is well over the median but, even with extra income, I'm taxed more or less like everyone else. In about 2-3 years, with the start of my residency, I get boosted up to a much less pleasant tax-bracket, one usually reserved for people who're able to talk at the theater.
I take as a general rule of thumb to have at least 6 months of expenditures in a highly liquid state (e.g. insured deposits in a bank account) for emergencies. Depending on your job security, you might be able to do with less (or need more), but I prefer to err on the side of caution.Quote:
Originally Posted by Aimless
Also, any money you're saving up to spend in the nearish future - say, annual vacation funds, or funds for a near-term purchase of a car/home downpayment/etc. - should be stashed away in cash equivalents unless you're willing to take a loss on principal. Investing in equities is not for the short term.
Putting some money into a domestic Swedish fund is fine, but I would strongly urge you to have most of your stock allocation in broader based index funds. You already have your jobs/wages and the value of your cash holdings tied up in the Swedish economy - I wouldn't want to also have most of your retirement in the same boat. Even if the fund in question is 'historically' decent, I'm sure you're well aware that past returns do not guarantee future results. You don't need much complexity or fees to have a more diversified portfolio - honestly, for me all I've got is three basic stock funds (US domestic, developed foreign, developing foreign) and a basic bond fund. You can get most of these with expense ratios under 0.2%, often lower than 0.1%.Quote:
A significant portion will initially indeed be invested in aforementioned Swedish index fund, primarily for reasons of simplicity and cost and assorted other advantages that come with signing on with the bank in question. It's historically been a safe, reliable and productive investment though it's probably heading for a bit of a nosedive in the short-term. From there I expect I'll branch out into other markets, starting with whatever cheap and reasonable fund I can find that tracks the S&P 500, and then looking at both our European neighbors and developing markets. I don't think I'll be worrying my bobble-head with questions like whether or not I should exit the market at certain times. If I have money and time left over, I may consider looking at more niched funds or individual stocks, but right now such pursuits would not be worthwhile :cry:
Overall, I think we're going to be fairly conservative with like >90% of our saving and more gutsy with the remaining <10%. Both of us are as risk-averse as grandparents and, if all goes well, likely to have good incomes anyway. If I want to take large risks with money or just, you know, waste it on iPads, I plan to have it come from taking out comp-time as $$$.
I think it's also wise to have two distinct pots of money. One pot is your retirement savings - full of 100% boring investments. The other pot can be 'play money' - you invest for shorter time periods in riskier assets (single stocks, leveraged funds, etc.) that you have in order to provide for iPad money. If you're secretly an investing genius and can turn that money into a billion bucks, fantastic - but having the clear distinction will mean you are never tempted to mix unnecessary risk with your retirement savings.
In this case it may indeed be wise to buy. Whether it will be wise to front-load your mortgage payments to pay it off as soon as possible (and forego other saving, like retirement) is up to you and your particular tastes. In most cases I don't find it would be a move I'd choose, but obviously Hazir would disagree. Just talk it over with the lady and make your own decision!Quote:
Whether or not it would make sense remains a tricky question. Finding nice and "affordable" apartments with very low monthly costs isn't all that difficult, in the cities we're considering. It's finding a good apartment for rent that's so difficult. Rents are high, often higher than the average monthly cost of fees, interest and amortisation, and those apartments are often just not in places we'd like to live.
IIRC there are some decent online models out there - assuming certain average returns on your money, the size of a mortgage and downpayment, the cost of renting an equivalent home, tax rates, etc. Honestly, though, given what you said in the above quoted bit about the availability of suitable places to rent, you may wish to buy irrespective of that calculation. The length of time you take to pay off the mortgage will be a more useful discussion for such calculators, though, since there's also an opportunity cost there.Quote:
Saving for the down-payment is doable. Getting a mortgage at just over 3% isn't likely to be a problem. What puzzles me the most is the question of opportunity costs, notably the one associated with putting money toward a down-payment on an apartment rather than investing it in something more productive (with interest payments and amortization added to that). I'm having a hard time sorting out the numbers and comparing them to the opportunity costs of throwing money at rent instead of investing.
Lastly, I don't think I said this above - congrats with moving on with your life and becoming a 'real' person! Sometimes it's a bitch to sort out the details of being an adult, but I think the rewards are well worth it. I applaud you and the lady for thinking about these issues seriously and trying to have a coherent plan sorted out.
http://www.google.com/finance?q=NASDAQ:AAPLQuote:
Originally Posted by Lewkowski
Wish I had put some money into it. Got there years earlier.
It has lost a sixth of its value in the last 10 weeks...
Bubbles happen when people buy because prices go up, and they go up because people buy. In 1575 they believed gold was safe, in 1929 believed said stocks were safe. In 2008 they believed houses were safe. Now people say again gold is safe...Quote:
Originally Posted by agamemnus
Nothing is safe.
Maybe I should be asking y'all for investment advice, too. :eek:
Should I pay off my home mortgage, or try to refinance at rates less than 3%? Will the money I "save" be "safer" in stocks, bonds, ETFs, CDs, mutual funds, or what? Will the money I use to pay off the mortgage debt be returned if/when I sell the house? Which has the greater ROI? Should I try to age-in-place and use my home as equity, or sell and move?
PS: I'm an unemployed, single, early retiree, with no employer pension or benefits, with paltry SS benefits, and buy my own health care. I have two kids, one minor still in school, another "emancipated" but with investments I'd made as his Guardian. I can't/won't revoke those investments, because that's the decision I made for their education, and their futures. Once my youngest son is in college (or the military) I can use cash to remodel rooms into a granny flat, care-taker quarters, or rent the space to college students.
How should I proceed?