Land Speeder
InstaH8R
No not this...
INVESTING!
INVESTING!
Hey Big Man, Lemme Hold a Dolla (Investing) (1 Viewer)
- Thread starter Land Speeder
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justbecause
perpetually lost.
Quick links to the early retirement movement? hallam talks about it some. essentially they all involve leaving the country. and i only habla engles.
and i have to read more about the RSA, I had two thoughts until Eric made me start wondering. 1) I thought my involvement wasnt optional 2) I thought it was a guaranteed return as long as the state didnt go belly up.
Land Speeder
InstaH8R
- Thread starter
- #3
Matt! gib us some podcast links!
No way Jose on the RSA guaranteed returns. It is invested and not easy to see what it is invested in. Looks like the returns are pretty close to the s&p 500 but the reporting periods are different so it is difficult to compare. My bil is an accountant and tried to do a comparison for my mil and had a tough time with it.
justbecause
perpetually lost.
having liquid money is the other big consideration for us right now. I have enough to pay off all the student loans; but if I did that I would be short of a 6 month emergency fund. It would take months to rebuild the savings I have. years if I only saved the current monthly payment. In the event of an emergency I can defer payments on the student loan, or since I am payed ahead on my loans by 4+ years I could reconsolidate my payment and lower my "required" payment... if there was an emergency.
I am going to have to look at my RSA paperwork again. I havnt thought about it in 2 years.
I am going to have to look at my RSA paperwork again. I havnt thought about it in 2 years.
Land Speeder
InstaH8R
- Thread starter
- #6
I haven't done anything more than looking at my moms paperwork "laying around" in her stack of important papers and also hearing them on the news and the like... But just a quick tickle of the googles shows this recent article. There are obviously old ones from each year past, and lots of them.
http://yellowhammernews.com/busines...ng-up-rsa-to-the-tune-of-billions-of-dollars/
"Too big to fail" eventually also fails.
Well then it really is your call. Having savings is a huge thing that seems to be unheard of in today's society. I have a hard time letting them dollars out of my account to. Just something comforting to know you have them "just in case" so again, modify the plan to fit your needs. If the loans aren't hurting you and you have your emergency fund set up, then just move on to something else. Maybe invest in something that is more liquid. Set up a small stock account and dabble in the market to see if you can make a little extra. Just be careful, as you eluded to, with the little one on the way, having easy access to those funds is gonna be handy.
There is no magic bullet and no one can tell you what's right for you. I am also by no means one to offer investing advice, I just took a looksie in my 401k investments and realized that I had one or 2 investments that were carrying my whole portfolio. I need to go set down with a pro and see where I really need to be. And that is probably the best advice, to find a GOOD, honest financial advisor to talk to you about your goals and help you lay down the best track to get you there.
There is no magic bullet and no one can tell you what's right for you. I am also by no means one to offer investing advice, I just took a looksie in my 401k investments and realized that I had one or 2 investments that were carrying my whole portfolio. I need to go set down with a pro and see where I really need to be. And that is probably the best advice, to find a GOOD, honest financial advisor to talk to you about your goals and help you lay down the best track to get you there.
Early retirement podcast links:
These are all good, I especially like the first two episodes:
http://www.madfientist.com/podcast/
very good:
http://www.doughroller.net/thepodcast/
skip the first few:
http://radicalpersonalfinance.com/archive/
more fun, not as educational:
https://www.listenmoneymatters.com/show/
http://www.stackingbenjamins.com/podcast-2/
These are all good, I especially like the first two episodes:
http://www.madfientist.com/podcast/
very good:
http://www.doughroller.net/thepodcast/
skip the first few:
http://radicalpersonalfinance.com/archive/
more fun, not as educational:
https://www.listenmoneymatters.com/show/
http://www.stackingbenjamins.com/podcast-2/
I don't think there is anything you can do unless you change jobs. It is as good as anything
justbecause
perpetually lost.
in a perfect world I would have a farm.
non-liquid assets tied up in land/equipment.
liquid.
cows birthing, a calf right now is ball parking a grand at auction.
I know a guy subsidizing his income with a 30 head herd. he said it takes a little less than an hr a day to take care of everyone and not much in hay and other consumables.
takes a dozen or more calfs to auction each year.
obviously the start up costs are huge, and you arent going to make that back at 12k per year. but its paid for. thats basically a bunch of money trees walking around for him at this point.
and kait and I are pretty hard core foodies. so if I could work and she could stay home and take care of all that....
non-liquid assets tied up in land/equipment.
liquid.
cows birthing, a calf right now is ball parking a grand at auction.
I know a guy subsidizing his income with a 30 head herd. he said it takes a little less than an hr a day to take care of everyone and not much in hay and other consumables.
takes a dozen or more calfs to auction each year.
obviously the start up costs are huge, and you arent going to make that back at 12k per year. but its paid for. thats basically a bunch of money trees walking around for him at this point.
and kait and I are pretty hard core foodies. so if I could work and she could stay home and take care of all that....
justbecause
perpetually lost.
read some info on the RSA.
unless I spend a lot more time (and money) in the system than I expected to my benefits arent going to be much, when and if I reach retirement age.
but, the good news is my participation in the program is mandatory. so, thats one less decision I have to worry about making. lol
unless I spend a lot more time (and money) in the system than I expected to my benefits arent going to be much, when and if I reach retirement age.
but, the good news is my participation in the program is mandatory. so, thats one less decision I have to worry about making. lol
Land Speeder
InstaH8R
- Thread starter
- #12
Please tell me you're not a teacher. What the hello kitty are you doing to be in RSA?
justbecause
perpetually lost.
Teachers is a different one. So is LEO.
I work for a 501c3 that participates.
I work for a 501c3 that participates.
justbecause
perpetually lost.
besides, if i was a teacher i would be awesome. students need to be exposed to anarchism and the non-aggression principal.
Land Speeder
InstaH8R
- Thread starter
- #15
What? You WORK for a NON-PROFIT org that INVESTS into a STATE funded retirement system? Actually. FORCES their employees to participate?! Guess now we know why the RSA is a paper tiger.
justbecause
perpetually lost.
I am reading on the RSA site, I dont have my benefit package in front of me. and I had to request a copy of my # so i could log onto the site. thats being snail mailed.
"Mandatory Participation Participation in the ERS is mandatory if a person is employed in a position eligible for coverage in a non-temporary capacity on at least a onehalf time basis earning at least the federal minimum wage. Once enrolled, the member must continue participation until employment is terminated. Active members of the Teachers’ Retirement System (TRS) are not eligible for ERS participation."
I guess its mandatory for me?
I am going to move my old junk into a vanguard account. see how that goes for 10 years.
"Mandatory Participation Participation in the ERS is mandatory if a person is employed in a position eligible for coverage in a non-temporary capacity on at least a onehalf time basis earning at least the federal minimum wage. Once enrolled, the member must continue participation until employment is terminated. Active members of the Teachers’ Retirement System (TRS) are not eligible for ERS participation."
I guess its mandatory for me?
I am going to move my old junk into a vanguard account. see how that goes for 10 years.
Have you heard of betterment?
https://www.betterment.com
Mostly vanguard funds (etfs) from what I have heard but you just pick your stock vs bond % and they handle everything else.
https://www.betterment.com
Mostly vanguard funds (etfs) from what I have heard but you just pick your stock vs bond % and they handle everything else.
Here's the thing about loans and "no payments." (Just to argue the other side of the point)
If your loans are at a good percentage rate (as interest rates have been low) and the payment isn't bad, it'd be better to invest with the money you'd pay extra, rather than paying them off sooner.
For instance, let's say your loan rate is fixed at 4.5%. If you can beat 4.5% investing in an index fund over the same term, you're better off investing the extra than you would be paying it off sooner.
For example, my wife has some small student loans, and we could write a check today and make them go away. However, I'd rather save and invest more, because in the long game that money is going to make more doing that than it will save us in interest on her loans, by a fair amount.
Credit cards are a different game entirely, and that s***'s bad any way you slice it. Loans aren't evil, and can be financially beneficial in the long run. All depends on the cost of the money and the rate of return you can get having money somewhere else.
Food for thought.
If your loans are at a good percentage rate (as interest rates have been low) and the payment isn't bad, it'd be better to invest with the money you'd pay extra, rather than paying them off sooner.
For instance, let's say your loan rate is fixed at 4.5%. If you can beat 4.5% investing in an index fund over the same term, you're better off investing the extra than you would be paying it off sooner.
For example, my wife has some small student loans, and we could write a check today and make them go away. However, I'd rather save and invest more, because in the long game that money is going to make more doing that than it will save us in interest on her loans, by a fair amount.
Credit cards are a different game entirely, and that s***'s bad any way you slice it. Loans aren't evil, and can be financially beneficial in the long run. All depends on the cost of the money and the rate of return you can get having money somewhere else.
Food for thought.
For something long, long term like a mortgage I would agree, to a point, but for shorter term loans I dont. Psychology is, I think, the most important aspect of personal finance.
Say you have a student loan at 4.5%. You could "probably" beat that with an index fund - over time. No guarantee you will beat it next year, or over the next 2, 3, 5 years even. But paying down the loan results in a guaranteed 4.5%. There is a risk associated with carrying the debt and some amount of stress to go along with it. For me the potential minimal benefit of investing over paying off the debt is not worth it.
Also, your example assumes you will have the same motivation to invest the money as you would to pay down the loan. Most people don't, they go out to eat and buy houses and cars that they can't afford.
Realistically most people would not and do not go out and borrow money just to invest it. There is really no difference in that and choosing not to pay off an existing debt.
Say you have a student loan at 4.5%. You could "probably" beat that with an index fund - over time. No guarantee you will beat it next year, or over the next 2, 3, 5 years even. But paying down the loan results in a guaranteed 4.5%. There is a risk associated with carrying the debt and some amount of stress to go along with it. For me the potential minimal benefit of investing over paying off the debt is not worth it.
Also, your example assumes you will have the same motivation to invest the money as you would to pay down the loan. Most people don't, they go out to eat and buy houses and cars that they can't afford.
Realistically most people would not and do not go out and borrow money just to invest it. There is really no difference in that and choosing not to pay off an existing debt.
Yeah, agree on the psychology of it, 100%. Discipline is key. I automate all of my stuff as MUCH as humanly possible, to have it all taken out and deposited where it needs to go before I ever see it hit a checking account.
In the case of my wife's, it's really easy, because her three loans are all <3%. Even with a bad fund I'm fine with that risk, much less something with a low expense ratio and solid management team behind it.
The other thing that I don't necessarily agree with is beating it over 2, 3, 5 years. At any age <40 or so, you're in a way longer game than that. Also, most student loans are on the term order of a mortgage and not a car. If the index fund / market takes a s*** in year two and you stick with it until it recovers, you'll do even better than you would if it had massive returns year two and then leveled out. Obviously there's considerably more risk with individual stocks, but that's why we're talking solid funds.
In the case of my wife's, it's really easy, because her three loans are all <3%. Even with a bad fund I'm fine with that risk, much less something with a low expense ratio and solid management team behind it.
The other thing that I don't necessarily agree with is beating it over 2, 3, 5 years. At any age <40 or so, you're in a way longer game than that. Also, most student loans are on the term order of a mortgage and not a car. If the index fund / market takes a s*** in year two and you stick with it until it recovers, you'll do even better than you would if it had massive returns year two and then leveled out. Obviously there's considerably more risk with individual stocks, but that's why we're talking solid funds.
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