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Post by Dutch on Mar 11, 2024 22:59:40 GMT -5
Last night, I got off work and got home, and after a bit of grub, my phone rings. Dang nabit, I'm all ready for a quiet evening, and my pre slumber, and some doggone coal cracker from Schuylkill County, by the name of Stroupy, is calling. Reluctantly, I answer. LOL.
Instead of a political diatribe, he was looking for some advice on how to invest the 401k money he rolled over a while back.
After some explaining and guidance, he entered a trade into his Fidelity account, to be executed when the market opens. A simple, market tracking S&P 500 ETF from Vanguard, for much of it. The rest will go into another ETF that is a bit more technology heavy.
Anyway, an hour and 45 minutes later, WAY past my old person bedtime, we hung up.
Barely a political word was spoken, just a great conversation with a truly good person. Yeah, he's a bit stubborn sometimes, but one of the more genuine people I've ever known.
So Bryan, thanks for the call, thanks for great conversation and I hope in 30 years, you drink a foamer, and think back to a conversation that, hopefully, will help lead to a more secure future for you and your family.
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Post by davet on Mar 12, 2024 5:37:34 GMT -5
Most times, those are the best calls to have.
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Post by Dutch on Mar 12, 2024 6:20:16 GMT -5
Most times, those are the best calls to have. You are so right.
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Post by fleroo on Mar 12, 2024 7:17:07 GMT -5
I've had my 401K in a mix of Vanguard S&P funds for 25 years, since it was switched over from Merrill Lynch. Few years ago, decided to go safer with 50% of it, so stuck it that portion in Bonds. Great move........ NOT !
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Post by rusty on Mar 12, 2024 7:20:26 GMT -5
You did a good thing, Dutch. If stroup takes you advice and is patient, he will be very grateful to you as he nears retirement age. I hope you mentioned the benefits of funding a ROTH too. At his age one of them would have a lot of time to grow. And he can draw the money he puts in out after five years with no penalty or tax to pay if he needs or wants to.
Asking for advice from trusted folks who have been where you are is a good thing, following the advice is a wise thing.
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Post by rusty on Mar 12, 2024 7:23:46 GMT -5
I've had y 401K in a mix of Vanguard S&P funds for 25 years, since it was switched over from Merrill Lynch. Few years ago, decided to go safer with 50% of it, so stuck it that portion in Bonds. Great move........ NOT ! How close did your bond investments come to keeping up with inflation, Fleroo? I have been putting about 50-75% of my dividend in cds and Ibonds as a safer play than stocks. I'm looking for something better.
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Post by fleroo on Mar 12, 2024 7:28:32 GMT -5
Honestly, I'd have to go into my account, and see the trend over about the past 5 years, as it was about 5 years ago that I split 50/50 into Bonds. But, my guess is that they got their azz kicked, as inflation went through the roof the past couple years ago, and Bond rates went to shat as the Feds increased interest rates looking for the soft landing.... that apparently they may accomplish.
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Post by Loggy on Mar 12, 2024 7:36:42 GMT -5
Very sound advice Dutch!! The S&P drives significant market sectors that support America's ever expanding economy plus includes segments of international presence with it's composite base having heavy multinational presence. Over time it has certainly been a very sound investment course.
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Post by Dutch on Mar 12, 2024 8:11:17 GMT -5
Very sound advice Dutch!! The S&P drives significant market sectors that support America's ever expanding economy plus includes segments of international presence with it's composite base having heavy multinational presence. Over time it has certainly been a very sound investment course. Yes, I also tried to explain the international component as that's not well understood by many. He asked me if I had put my money into the S&P, and I didn't. I said that was my mistake, and he's benefitting from my mistakes. Both my daughters have much of their money in S&P funds now, along with QQQ.
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Post by Dutch on Mar 12, 2024 8:14:00 GMT -5
You did a good thing, Dutch. If stroup takes you advice and is patient, he will be very grateful to you as he nears retirement age. I hope you mentioned the benefits of funding a ROTH too. At his age one of them would have a lot of time to grow. And he can draw the money he puts in out after five years with no penalty or tax to pay if he needs or wants to. Asking for advice from trusted folks who have been where you are is a good thing, following the advice is a wise thing. I explained the benefits of the Roth, and I think his new money should go there. Current money is from a 401k rollover from his previous employer. I think he's on a good path and thinking ahead. I also mentioned using a high yield money market to park emergency funds, I use Ally.
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Post by fleroo on Mar 12, 2024 8:59:50 GMT -5
My local bank, has a CD for 5% - 8 month term. They are definitely getting better, and I'm sure you can shop around and do a hair better, as Keybank never has the best rates for anything. That's good enough for my quick access "hand money". I hope the CD rates sustain.
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Post by Dutch on Mar 12, 2024 9:33:56 GMT -5
My local bank, has a CD for 5% - 8 month term. They are definitely getting better, and I'm sure you can shop around and do a hair better, as Keybank never has the best rates for anything. That's good enough for my quick access "hand money". I hope the CD rates sustain. Once the Fed starts cutting, they won't.
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Post by davet on Mar 12, 2024 11:08:04 GMT -5
I never like the idea of a Bond fund. If you want a safe and steady % of return, then buy a bond. Or invest in Fed notes or at the very least CD's (except when they are paying .000005%)
Be careful of corporate bonds. Just blue chip companies. None of that "Ed's company great ROR on our bonds" stuff.
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Post by fleroo on Mar 12, 2024 12:35:05 GMT -5
Correct. Which is why the return diminishes as the term increases.
My FA, Edward Jones' rates
4 Mo - 5.35 6 Mo - 5.30 9 Mo - 5.20 12 Mo - 5.10
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Post by davet on Mar 12, 2024 13:30:16 GMT -5
Since December of 2022 I'm up a low of 26% and a high of 31%. I don't have bonds or bond funds or CD's or any fix rate investments.
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Post by CoureurDeBois on Mar 12, 2024 16:05:08 GMT -5
I'm in the process of rebuilding my 5 year ladder right now on CD's, should have it done next year about this time. Overall it's returning about 4.25 %. Should be a little better in a couple of months when 2 looser come due and are reinvested in CD's. My portfolio of mutual funds is averaging me around 12 to 14% return. Not getting rich, but keeping my head above water, I'm happy.
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Post by stroupy on Mar 12, 2024 17:57:53 GMT -5
Was a good conversation. I have no clue on trading and the stock market and rolled over my old 401k a few months back and didn't realize I didn't have it doing anything. Once I realized it I immediately called Brad and was wondering if he would pick up and he did post haste! Gave me solid advice (I hope lol) then we got to talking about everything else. Definitely a good conversation. I may not come off as a nice guy but 99% of the time I am and think a lot of Mr. Gehman. He is an outstanding old man!
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Post by Dutch on Mar 12, 2024 18:57:27 GMT -5
Was a good conversation. I have no clue on trading and the stock market and rolled over my old 401k a few months back and didn't realize I didn't have it doing anything. Once I realized it I immediately called Brad and was wondering if he would pick up and he did post haste! Gave me solid advice (I hope lol) then we got to talking about everything else. Definitely a good conversation. I may not come off as a nice guy but 99% of the time I am and think a lot of Mr. Gehman. He is an outstanding old man! There are a few outstanding old men on here, I just happen to be one of the younger old guys. 🙂
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Post by fleroo on Mar 13, 2024 7:42:30 GMT -5
Trying to figure out how it wasn't doing "anything" ? It's been a long time since I've rolled a 401K, but you used to have to do it within a certain period of time, and if not, you were knocked with the taxes and in your case, early withdraw penalty of 10%. Or maybe you're saying the returns just weren't up to your pal Brad's standards.
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Post by rusty on Mar 13, 2024 7:51:36 GMT -5
What did you roll your 401K into at first, stroup.
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Post by Dutch on Mar 13, 2024 7:55:17 GMT -5
Trying to figure out how it wasn't doing "anything" ? It's been a long time since I've rolled a 401K, but you used to have to do it within a certain period of time, and if not, you were knocked with the taxes and in your case, early withdraw penalty of 10%. Or maybe you're saying the returns just weren't up to your pal Brad's standards. He basically got it out of his former company's 401, put it in a Fidelity brokerage account as cash.
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Post by rusty on Mar 13, 2024 8:05:08 GMT -5
Did he pay the regular tax and the 10% penalty? If the taxes are paid he might be able to put it into a ROTH now. It is now after-tax income. I Took a bunch out of some of my pretax stuff, paid the tax and put it in my roth. I was already 59 so I didn't have to pay a penalty.
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Post by Dutch on Mar 13, 2024 8:10:39 GMT -5
Did he pay the regular tax and the 10% penalty? If the taxes are paid he might be able to put it into a ROTH now. It is now after-tax income. I Took a bunch out of some of my pretax stuff, paid the tax and put it in my roth. I was already 59 so I didn't have to pay a penalty. I've considered that, but I really don't think it'll pay off for me.
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Post by Loggy on Mar 13, 2024 8:19:20 GMT -5
Trying to figure out how it wasn't doing "anything" ? It's been a long time since I've rolled a 401K, but you used to have to do it within a certain period of time, and if not, you were knocked with the taxes and in your case, early withdraw penalty of 10%. Or maybe you're saying the returns just weren't up to your pal Brad's standards. He basically got it out of his former company's 401, put it in a Fidelity brokerage account as cash. Likely was qualified Self Directed IRA Rollover/Brokerage account to avoid premature withdrawal penalties & tax??
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Post by rusty on Mar 13, 2024 8:19:35 GMT -5
Our tax guy suggested we look into it and told us what we could take out to keep us from being bumped into the next tax bracket. I did it for three years. I was investing the money in both accounts, so I liked putting it where it won't be taxed.
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