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The Financial Fitness Thread

binary visions

The voice of reason
Jun 13, 2002
21,882
763
NC
Even if he bought at the lowest of lows he still must have near 6 figures in, which kind of tells me he isn't in it to get ahead or be comfortable.

To many of us there is an amount we can call enough. For some people that number is all of it.
From what I can tell, the original guy basically dropped his entire IRA into it @ $50k or something. Which suggests to me he wasn't wildly gambling with house money, and he believed in it long enough to hold the position since sometime in 2019.

I mean, you're obviously right. Just didn't seem to fit the profile of someone playing the numbers game.

Anyway. Did anyone else just dump their entire investment portfolio into GME?

No? Just me?
 

Westy

the teste
Nov 22, 2002
44,913
10,565
Sleazattle
From what I can tell, the original guy basically dropped his entire IRA into it @ $50k or something. Which suggests to me he wasn't wildly gambling with house money, and he believed in it long enough to hold the position since sometime in 2019.

I mean, you're obviously right. Just didn't seem to fit the profile of someone playing the numbers game.

Anyway. Did anyone else just dump their entire investment portfolio into GME?

No? Just me?
Seems like the perfect time to buy. It will only go up.
 

Adventurous

Starshine Bro
Mar 19, 2014
7,141
4,343
Crawlorado
So when hedge funds do it, it's capital management or banking services, but when the people do it, it's manipulative and unfair. Got it.

Glad I liquidated my position in Nokia yesterday afternoon when I heard rumblings of the same fuckery afoot with that stock too. Didn't make a killing or anything, but I turned around and used the profits to buy some MSFT, JNJ, and KO. Not as spicy, but I'm playing the long game.
 
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Westy

the teste
Nov 22, 2002
44,913
10,565
Sleazattle
I would assume because the stock market is overinflated, gold is overinflated bitcoin is overinflated and inflation is real.
 

Pesqueeb

bicycle in airplane hangar
Feb 2, 2007
34,474
8,827
Riding the baggage carousel.
My brief perusal of Reddit this morning suggests a high level of :tinfoil:. Lots of claims of coordinated division attempts of r/wallstreetbets, and/or claims of Conglomo Corp trying to cover losses by driving up silver prices. Either way, more confirmation for my bias that it's all just a bunch of rich people fuckery. Might be some real money to be made in Alcoa shares at this point.

e.g.:
 

Adventurous

Starshine Bro
Mar 19, 2014
7,141
4,343
Crawlorado
Read something the other day saying that mathematically speaking, the best way to invest for retirement was:

1. Invest in employer sponsored plan until employer match is achieved
2. Max out roth IRA if eligible
3. Resume investing in employer sponsored 401k up to the cap

Anyone have the numbers to back this up? I'm wondering for whom this is the optimal strategy.

And yes, I am still within the subset eligible to contribute to a Roth IRA.
 

Toshi

Harbinger of Doom
Oct 23, 2001
31,673
3,860
Seems strongly dependent on current income, retirement income, and assumptions of future brackets for said retirement income at that future date.
 

Nick

My name is Nick
Sep 21, 2001
20,013
7,727
behind you, don't wait up.
I agree with the good Dr.
I set aside the annual max for my 401k, I have an ESOP, and I have a gambling account for stupid investments, although that is partially made up of ETFs as well as stocks.

Regardless, start by maxing your 401k, evaluate your remaining budget, and after expenses find a balance with any remaining funds between fun money and additional investing. Working suck. Working sucks moar if you aren't enjoying your 'extra' money.
 

binary visions

The voice of reason
Jun 13, 2002
21,882
763
NC
Read something the other day saying that mathematically speaking, the best way to invest for retirement was:

1. Invest in employer sponsored plan until employer match is achieved
2. Max out roth IRA if eligible
3. Resume investing in employer sponsored 401k up to the cap

Anyone have the numbers to back this up? I'm wondering for whom this is the optimal strategy.

And yes, I am still within the subset eligible to contribute to a Roth IRA.
The theory is that taxes (generally) keep going up, and if you expect to maintain a relatively similar lifestyle in retirement, your total taxes paid might be higher than today. Numbers aren't necessarily perfect because they're mostly based on speculation of the future.

It's always advantageous to get your employer match (100% ROI), of course.

As Toshi said, this probably depends heavily on your current situation and future goals. Your traditional (pre-tax) contributions come out of your top marginal bracket(s), so you're basically betting that your future tax situation will be lower than your current top marginal bracket(s). Not a bad bet if you plan to retire modestly but have a high income today.

Your Roth contributions are post-tax, so you're paying your top marginal bracket and betting that your future tax situation will be higher than your current one, which could come from a high retirement savings or significantly higher future taxes. My in-laws are like this; never had a huge income but saved every penny and have a nice retirement.

All that said... my personal view is that there's a lot of value in having a good mixture, and probably not stressing about the efficiency too much. You want some pre-tax investments, because if everything you have is post-tax, then you're missing out on a big block of untaxed/lightly taxed income (i.e. the first couple of marginal income brackets). But if everything you have is pre-tax, you lose out on the ability to finesse your income bracket by taking some post-tax money. And frankly, if my retirement situation is such that I'm paying more taxes than in my working life, it means I'm pretty comfortable, and that's probably not a situation to stress too much about.
 

Toshi

Harbinger of Doom
Oct 23, 2001
31,673
3,860
If I'm paying more in taxes in retirement than I'm paying now then I should have retired 5 years earlier.
 

Adventurous

Starshine Bro
Mar 19, 2014
7,141
4,343
Crawlorado
Right now my mix is 15% pre-tax (exceeds employer match by quite a bit) to 401K + ~$3K annually to a Roth. I was just curious to see if there was a justification for dialing back my pre-tax and delegating that to post-tax. Not because I'm super worried about it, more so to optimize my savings strategy with little upfront effort.
 

Nick

My name is Nick
Sep 21, 2001
20,013
7,727
behind you, don't wait up.
never mind percentages, if you can afford to set aside your max ($19.5k for your age?) do that, and get accustomed to the balance being your working budget. Then evaluate how much money is left for additional investments.
 

Toshi

Harbinger of Doom
Oct 23, 2001
31,673
3,860
never mind percentages, if you can afford to set aside your max ($19.5k for your age?) do that, and get accustomed to the balance being your working budget. Then evaluate how much money is left for additional investments.
Yup. Never get used to having the money in hand and you won't miss it.

/me stresses about affordability of this and that (the house!) but also is starting from a baseline of a 401(a) funded to the IRS annual comp limit, 403(b) and 457(b) maxed, family HSA maxed. Overflow goes to taxable for flexibility, which is good when making big impulse purchases! Sometimes if I'm feeling very secure then I load up the 529, but am going to shy away again from that for a while until the boat stops rocking.
 

SkaredShtles

I love NEWCASTLE and will ONLY drink NEWCASTLE!!!!
Sep 21, 2003
55,625
6,672
In a van.... down by the river
Right now my mix is 15% pre-tax (exceeds employer match by quite a bit) to 401K + ~$3K annually to a Roth. I was just curious to see if there was a justification for dialing back my pre-tax and delegating that to post-tax. Not because I'm super worried about it, more so to optimize my savings strategy with little upfront effort.
Pro-tip: don't have kids and you'll never worry about affording retirement. :homer:
 

Adventurous

Starshine Bro
Mar 19, 2014
7,141
4,343
Crawlorado
never mind percentages, if you can afford to set aside your max ($19.5k for your age?) do that, and get accustomed to the balance being your working budget. Then evaluate how much money is left for additional investments.
Working on it. Each raise I get now gets split between myself and savings. Though I *highly* doubt I'll find myself in a position, at least in the near future, to max out all of the accounts ala @Toshi.

Trying to plan it all using just my salary is certainly an exercise in creativity. Hence, this thread.

Pro-tip: don't have kids and you'll never worry about affording retirement. :homer:
Things get too bad and I can always channel my inner Virginia Woolf.

And take a few mid-life retirements, don't waste that shit on old age.
Mid-life retirement #1 already in the books.
 

Westy

the teste
Nov 22, 2002
44,913
10,565
Sleazattle
Working on it. Each raise I get now gets split between myself and savings. Though I *highly* doubt I'll find myself in a position, at least in the near future, to max out all of the accounts ala @Toshi.

Trying to plan it all using just my salary is certainly an exercise in creativity. Hence, this thread.



Things get too bad and I can always channel my inner Virginia Woolf.



Mid-life retirement #1 already in the books.

Also, don't move from Colorado to Massachusetts.
 

Adventurous

Starshine Bro
Mar 19, 2014
7,141
4,343
Crawlorado
If/when they have kids the savings in childcare from being close to parents could be absolutely immense.
One of if not the biggest reason we moved back. Of course, we currently cannot afford to live within 45 minutes of either set of parents, due to the ridiculous covid housing market. Didnt see that one coming. Pwned.
 
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binary visions

The voice of reason
Jun 13, 2002
21,882
763
NC
Right now my mix is 15% pre-tax (exceeds employer match by quite a bit) to 401K + ~$3K annually to a Roth. I was just curious to see if there was a justification for dialing back my pre-tax and delegating that to post-tax. Not because I'm super worried about it, more so to optimize my savings strategy with little upfront effort.
Guesstimate the future value of your savings, then calculate what the 4% safe withdrawal rate looks like on that. Add your estimated social security.

If that looks like more or similar dollars to what you are currently earning, you want to shift a little more to your Roth.

But honestly, for the majority of us, it has always seemed to me like there's too much guesswork involved to be really efficient. Whatever gains you get by figuring out your precisely optimal strategy is likely offset if your situation changes in 10 years (which is why I'm just shooting to make sure I have a mixture of both and not stressing about my specific mix).

The other benefit to a Roth is you can withdraw your contributions at any time, making it a good vehicle for both early retirement and emergencies.

Frankly, if an HSA is an option, that's probably the only thing that's almost guaranteed to be more optimal. Potentially no taxes paid on it, ever (depending on what you spend it on) and at retirement age you can spend it like a normal 401k with no penalties.
 

binary visions

The voice of reason
Jun 13, 2002
21,882
763
NC
Another piece which seems not to have been meaningfully discussed is pay interest on nothing.

Don't get loans for motor vehicles or anything else, pay credit card bills on time and in full.

The only probably necessary exception is a mortgage.
Agreed, though loans for vehicles can make sense if they're low enough. If you can get a loan for <2%, your can probably make your cash work harder than that.

Credit card interest is absolute poison, though.