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CoronitaParticipant[quote=XBoxBoy]I’m going to guess that this will be too expensive for our cheapskate Scaredy, but what about the Rivian SUV:
https://rivian.com/r1s%5B/quote%5D
I heard the space and reliability isn’t that great.
CoronitaParticipantIf I had to get something it would probably be a Hyundai Ioniq 5
If you don’t want to get gouged with a Toyota Highlander or Lexus RX or NX SUV….
You can consider getting yourself a Mazda CX5. They are pretty nice inside, and have pretty good gas mileage. Slightly underpowered, but good fit and finish and decent reliability. Size-wise, the CX5 is roughly the size of a RAV4
Galpin Mazda has over 61 CX5’s in stock. So they aren’t going to be marked up.
November 23, 2022 at 11:22 PM in reply to: Reminder: People never shut up about crypto gains, never mention the losses #826978CoronitaParticipant[quote=plm]I’m good with the treasury direct 13 week tbills ladder. Can get money out each week if I need it and it all can come out in 13 weeks. I’ll have to see when it renews there isn’t lost time to the next week’s auction or it’s instant. I do know that the interest is not going to compound. But doing a money market in the brokerage account is definitely something extra I should do.[/quote]
I hate treasury directs login web portal. That thing with the onscreen keyboard that you have to click to type your password is annoying. I know why they did it but still,.it’s annoying.
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November 23, 2022 at 8:27 AM in reply to: Reminder: People never shut up about crypto gains, never mention the losses #826976CoronitaParticipantSo PLM, the brokerages have to make money somehow, now that they offer free trading and don’t make as much off of the trading, so the they do this with the “float” of your money. So there’s a little caveat to each investment choice. Here’s my understanding of how it is (at least at Schwab). I stand to be corrected by anyone more knowledgeable though…
1. Money Market: the issue with money market is (1) it isn’t insured and (2) it’s like a mutual fund with a settlement date. So there’s 1 day settlement date.
2. CD’s purchased from brokerage. You’re not going to earn interest at the CD rate between the time you purchase the CD and the when the CD term starts (the settlement date). You’ll be earning interest at the rate for your cash held in your brokerage account (cash sweep option), which is probably <1%.. Read the fine print. Let me show you what I mean.
[img_assist|nid=27757|title=cdexample|desc=|link=node|align=left|width=500]In this example here, you can buy this 1 month cd right now that supposedly has a APY/YTM 3.918% / 3.850%... However, the settlement date for the CD isn't until 11/30/2022... What that means is even if you buy the CD today (11/23), you aren't going to be earning 3.918/3.85% until November 30th when the CD is actually purchased. Between now and 11/30, you're money will be earning the brokerage's interest rate for cash held in the account (which is probably less than 1%). The brokerage house holds on to your cash and actually does the purchase on 11/30... This doesn't matter as much if you buy a longer term CD like a 3 month or 6 month, but if you're buying a 1 month CD, having your cash held for 2 weeks almost half of the term of the CD...And in that case, you're better off buying the money market at 3.74% (I mistyped the yield above at 3.47..It's 3.74%..
If you do buy a CD from your brokerage, you want to buy it right before the settlement date, not weeks before. Sometimes, the CDs sell out the day before settlement, so you might need to check 2 days prior.
The other thing to think about wrto the CD, is what happens after it matures. You can elect to have it automatically roll into the specific bank's next term CD, but you won't know what the interest is. If you don't let it auto-roll, then when your CD matures, it will go back into your brokerage account, and then you'll need to buy another CD, with a waiting period until that new CD's settlement date is reached.
Hence, this is how brokerage makes money... You're paying for the convenience of doing this all from your brokerage account. But they are making money while they keep your cash until the CD settles and keeps the cash at the lower rate until the next CD you buy, if any.
3. CD's bought directly from a bank. If you buy a CD directly from a bank, there's usually no waiting/settlement date. Interest starts accruing right away.. But it can be a pain in the ass to move money to a bank and then when the thing matures move it back, especially if you're only doing 1 or 3 month CDs... And there's usually like a 2-3 days wiring transfer delay for money transfers between bank and brokerage.
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So, comparing the money market at 3.74% to the 1 month CD at 3.91% offered at schwab for purchase, the money market is probably better because since it just 1 day of settlement when you buy and when you sell the money market. You can get above 4% CD's for longer terms like 3/6/12 months. But the issue is if the Fed keeps raising rates, might not be a good thing to lock into a 6-12 month CD.
I buy both the money market and the 1 and 3 month CDs from Schwab, because I'm paranoid... although it's very unlikely Schwab's money market would collapse and not pay out, I just like to err on the side of caution and not put all my emergency fund into one basket.
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The other thing I noticed is a slight difference between Schwab and other brokerages like Fidelity and Vanguard.With Fidelity and Vanguard, you can designate how you want your cash to be held by the brokerage. So for example, you can designate that cash in the account be held in a "cash-sweep" account that is automatically invested into a money market fund. So in my Fidelity whenever I sell something, the proceeds auto-invest in the Fidelity money market FDRXX that currently has a 3.31% yield.
https://fundresearch.fidelity.com/mutual-funds/performance-and-risk/316067107
Vanguard is similar...Schwab use to allow you designate your cash-sweep account to default to their SWVXX money market fund. But they no longer allow this. So after you sell an investment it defaults to a cash-sweep account that earns very little interest, I think less than 1%..And you have to explicitly move it into the money market fund...
Again, I think Schwab does this so they can make money on the float, while offering you a higher rate than Vanguard and Fidelity on the money market.
Fidelity allows you to auto-invest your cash into their money market, but their yield is about .50% lower than schwab.
If you move in and out of positions all the time, Schwab is probably not a good option for you because you need to move your settled funds in and out of the money market to get the rate.
If you buy stocks occasionally and sell occasionally, then it's not that much of an effort to do an extra step to move cash into the money market fund....
Pick your poison 🙂
I will probably move my more frequently trading account to Fidelity.
November 22, 2022 at 5:55 PM in reply to: Reminder: People never shut up about crypto gains, never mention the losses #826974CoronitaParticipant[quote=plm][quote=The-Shoveler][quote=Coronita]
Funny you should mention that. I’ve been laddering CDs. Though money markets these days are looking good too.[/quote]Moved some into short duration treasuries, I think fed will take it to 7% potentially (unless the whole shebang blows). Time will tell.[/quote]
Building a 13 week treasury bill ladder to get 4 percent instead of 0.2 in my savings account. Stopped buying stocks, thinking it might be good to build cash in case there is a market crash coming so I don’t have to sell stocks at the bottom. Still losing money because inflation is higher but at least not losing as much this way. Bonds are boring but safe. Crypto is exciting but risky so I never bought any.[/quote]
These are the CD rates I’m seeing at Schwab.
[img_assist|nid=27756|title=cd november|desc=|link=node|align=left|width=600]
Also the yield for their money market fund SWVXX (not insured) is currently 3.45% and that’s pretty liquid (within 1 trading day)…
https://www.schwabassetmanagement.com/products/swvxx
For my emergency cash, I park it in a basket of CDs 1-6 months, and the money market fund.
November 19, 2022 at 7:30 PM in reply to: Reminder: People never shut up about crypto gains, never mention the losses #826968CoronitaParticipantOntario teachers pension fund got caught up in this too.
November 19, 2022 at 7:27 PM in reply to: Reminder: People never shut up about crypto gains, never mention the losses #826967CoronitaParticipant[quote=svelte][quote=Coronita]
Greed….I think when the dust settles, it’s pretty clear that what crypto has become is basically get rich ponzi scheme. Whatever original altruist attempt at a digital secure currency for some altruist social benefit has long past the moment people started trying to create their own currency and NFT in the quest to get rich quick.
This shit needs to be regulated so the idiots of the world don’t get burned as easily moving forward…
The other part that is really said is if you go to social media like IG and Facebook, etc you have a bunch of unlicensed kiddie trying to push the ill-informed about crypto and trying to get people to buy… In the financial industry, pushing for financial products has to be licensed and regulated to some extent….It’s the wild wild west on IG and Facebook, and frankly, IG and Facebook bears some responsibility for letting this sort of ill-advised finance “advice” persist and spread throughout their platform.
They should be heavily fined too.
You know when the biggest least financially savy people start cheerleading about how easy it is to make a lot of money gambling in something…then it’s time to get out…It’s like the “water-cooler stock market advice by the office receptionist theory”….If the at the office water cooler, everyone’s talking about how easy it is to make money in the stock market, even the least financially savy people…it’s time to get out.
For me, I’m old school and agree with Warren Buffet on crypto. I won’t touch it..Well $100 tops, is what I have on dogecoin and sushiswap, he he.[/quote]
Agree with virtually all of that.
Last year I had a few friends come up to me very excited about how they got into crypto – dogecoin, etherium, bitcoin, etc. I told them it was my opinion they should only put in “play money”, an amount similar to what they would take to Vegas and not get heavily invested in crypto. I’m even more of that opinion now. 🙂
And if the kind of wrecklessness witnessed with the companies who invested in FTX is indeed common far beyond FTX and crypto as has been suggested elsewhere in this thread, then the world is going to feel much more pain going forward.
I agree with Jeff Bezos – he recently said people should keep a hefty reserve of cash right now because things are going to tank hard soon.[/quote]
Funny you should mention that. I’ve been laddering CDs. Though money markets these days are looking good too.
November 18, 2022 at 7:58 AM in reply to: Reminder: People never shut up about crypto gains, never mention the losses #826964CoronitaParticipant[quote=svelte]Could this possibly be true?
The Bahamas ordered Bankman-Fried (and is that name for real? Seriously?) to transfer all FTX assets to The Bahamas when it filed bankruptcy?
This thing gets more bizarre every day!
How in the world did he convince some of the biggest institutions in the world to give him millions of dollars? It boggles my mind.[/quote]
Greed….
I think when the dust settles, it’s pretty clear that what crypto has become is basically get rich ponzi scheme. Whatever original altruist attempt at a digital secure currency for some altruist social benefit has long past the moment people started trying to create their own currency and NFT in the quest to get rich quick.
This shit needs to be regulated so the idiots of the world don’t get burned as easily moving forward…
The other part that is really said is if you go to social media like IG and Facebook, etc you have a bunch of unlicensed kiddie trying to push the ill-informed about crypto and trying to get people to buy… In the financial industry, pushing for financial products has to be licensed and regulated to some extent….It’s the wild wild west on IG and Facebook, and frankly, IG and Facebook bears some responsibility for letting this sort of ill-advised finance “advice” persist and spread throughout their platform.
They should be heavily fined too.
You know when the biggest least financially savy people start cheerleading about how easy it is to make a lot of money gambling in something…then it’s time to get out…It’s like the “water-cooler stock market advice by the office receptionist theory”….If the at the office water cooler, everyone’s talking about how easy it is to make money in the stock market, even the least financially savy people…it’s time to get out.
For me, I’m old school and agree with Warren Buffet on crypto. I won’t touch it..Well $100 tops, is what I have on dogecoin and sushiswap, he he.
CoronitaParticipantI was talking about this with a few folks and thought that if Trump really wants to stay relevant, he should do the following, because it would be so unexpected, that well it just might work…
1) Switch parties and register himself as a Democrat and run as a Democrat.
2) Come out apologizing for his bad behavior for the past 6 years and make a symbolic token gesture of supporting some protected woke group like some LGBTQ+ organization.
3)Start using people’s prefered pronouns of he/him, or she/her, or they/them.
4) Attack the GOP establishment for being a terrible monster of racist, homophobic, anti-science, anti-climate change, anti-environment, anti-abortion, election deniers that created a toxic american culture, and anti-vaxxer, flat earther bumpkins Shame on “them” for continuing this charade.
5) Attack DeSantis as being the POS ringleader for this GOP circus.
6) Run as a moderate with a theme of “Making America United Again”.
7) Embrace climate change and talk about being carbon neutral. And propose that the Federal Emissions standard should be updated to conform to the much stricter California CAFE standards.
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A lot of issues would be solved by Trump doing this
a) All the Jan 6 and corruption investigations led by mostly Democrats would suddenly stop
b) Trump could spend the next 4 years selling his merchandise and brand to much larger audience than for the past 6 years….Which is what he essentially did anyway.
c) We would see a lot of far right winger’s head explode and we would see a lot of far left winger’s hypocrisy once all the calls to lock him up stop once he is Democrat.
And the rest of us get to see the entertainment value of Trump successfully trolling the majority of the population and just how dumb many Americans are.
CoronitaParticipantI won’t prepare. I just will die like everyone else. Move on.
CoronitaParticipant[quote=treehugger]My hubby and I both have retirement plans through our current jobs, I am a Federal Govt employee, so not going anywhere until I retire and i max out what I put in that account.
Trying to figure out how to deal with this rollover IRA….looked at the Fidelity website and I can’t figure out how to roll into anything else? I spoke with them on the phone and for $3/month or 0.35% they will “manage it”. I looked online and there are robo managers, which appear to be free, but I can’t figure out how to get this stagnant rollover changed unless I pay?
As noted above I can reach out to Rich from this site, but feel like I am small potatoes and have never used a financial planner…I know I should, but need one that is ok working with a small fry?
So I guess follow up question, admitting i am totally ignorant and proving it here, what are good questions to pose? and are there financial planners who cater to dumb people who are scared and don’t understand anything about investments?
I feel like we are finally flowing good financially and now we want to start really understanding our options: We own our house-owe less than $300,000 with a 2.6% mortgage and current value ~1.2 million-plus have a rental condo we owe $150,000 with a 3.5% mortgage otherwise no debt.
Trying to pick the brain trust on this site, since it has served me so well with my real estate options over the years![/quote]
Ok, now with more information that you are a Fed Government employee..What I was trying to say was….
Do you have a TSP Retirement Plan (Fed Government employee equivalent of a 401k at for those of us in the private sector)?
If so, have you considered just taking this $12k amount and rolling it over into your TSP account?
That seems like it would be the easiest thing to do. And from what I can tell with a TSP retirement plan,you can pick “target retirement” date fund and then just set it and forget about it….
https://www.tsp.gov/tsp-basics/move-money-into-tsp
(Forget what I said about a Backdoor IRA….It’s probably not something else you wanted to do. It was just an added benefit that you could do)
CoronitaParticipant[quote=plm]For the backdoor ROTH, I think the reference is to putting in 6 or 7K into a ROTH IRA by first putting it into a normal IRA and then converting (conversion has no income limits versus adding to a ROTH IRA does). And the problem is that having an existing rollover IRA makes it part of the conversion. Been doing it every year but then I never rolled over my 401k into an IRA. If I do roll over my 401k, it probably would not be possible for me to do the backdoor Roth IRA each year.
But I think this is off topic because conversion to a rollover IRA already happened so the question is really how to invest it given that with an IRA you have full control over it.[/quote]
My point was the easiest thing to do is to take what was rolled out into a Rollover IRA from an old employer, and roll that amount back into an existing 401k or in the case of the OP, the Federal employee’s version of the 401k (TSP?)…especially if she already has a sizable account balance on her existing TSP retirment account and doesn’t want to or know what to do with the extra $12k from a previous employer…. It’s the “easiest” thing to do. The expense ratio on the TSP plans I think are less than 0.055% It’s not a bad plan…And there’s like $700+billion invested by roughly 6 million people .
CoronitaParticipant[quote=ucodegen][quote=Coronita]
So long as you have any IRA account including a rollover IRA, you won’t be able to do a backdoor Roth IRA. And you want to do this before the government decides to take away the ability to do Backdoor Roth IRA
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That is not my understanding. Checked around, and it looks like you can do the Backdoor Roth when you already have IRAs and Rollover IRAs. You can also do a backdoor Roth in steps. There is no limit on the number of backdoor conversions you do, however there must be a 12 month period between any Backdoor rollover. The tax rules are the same whether you do a Backdoor Roth from IRA accounts or 401k accounts, form 8606 applies. Taxes are required to be paid on any Backdoor Roth conversion because you are converting pre-tax to after-tax dollars. There is an interesting ‘Backdoor Roth’ option, if your employer offers it. If they allow post tax contributions to the 401k, you can put up to $40,500 of post tax dollars in 2022 into the 401k and then roll it over into a Roth. From what I can see, it gets around the contributions income limit on Roth IRA/401k contributions. Its being called a ‘Mega Backdoor Roth’.As for the original question as to where to put the $12k, I would not put it in the hands of ‘advisors’. Several years back, Warren Buffet put out a challenge to hedge fund money managers that he could beat their returns using just index funds using a buy and hold strategy. While some of the money managers were initially ahead, the end result in about 8 years was that Warren Buffet had convincingly won.
https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp%5B/quote%5DThat doesn’t sound correct…
Google “Backdoor IRA Pro-Rata Rule”This article does a pretty decent job explaining it
https://smartasset.com/retirement/a-guide-to-the-pro-rata-rule-and-roth-iras
There is an sample tax calculation provided, reposted here:.
[quote]
Let’s say you have $100,000 in a Traditional IRA, $7,000 of which came from non-deductible contributions. Because you’ve already paid taxes on $7,000, the IRS will not require you to pay taxes on that amount twice. Some retirement savers believe that, since they’ve already paid taxes on that amount, they can then convert $7,000 to a Roth IRA without paying taxes again. By law, though, you cannot dictate that your Roth conversion will only use those after-tax funds.If you’d like to convert $7,000 to a Roth IRA, you will need to calculate how much of your IRA funds are actually taxable. The IRS requires you to include the value of all your non-Roth IRAs as the basis. The formula for tax purposes looks like this:
(non-deductible amount) / (total of all non-Roth IRA balances) = non-taxable percentage
(amount to be converted to Roth IRA) x (non-taxable percentage) = amount of after-tax funds converted to Roth IRA
In other words, 7% of the $100,000 is non-taxable since you already paid taxes on those $7,000. But if you want to convert $7,000 to a Roth IRA, in reality, the converted amount comes from 93% pre-tax funds and only 7% after-tax funds. You’ll have to pay taxes on 93%, or $6,510, of the converted amount. By the same token, that means $6,510 of the original non-deductible $7,000 is still in the Traditional IRA, and any future after-tax contributions to your non-Roth IRAs will further complicate your Pro-Rata percentage, making future withdrawals messier than you might assume.
[/quote]CoronitaParticipantIf your current household income doesn’t allow you to contribute to a Roth IRA, I think you should roll it into your current employers 401k plan, if the plan isn’t that bad…so you can do a Backdoor Roth IRA…
So long as you have any IRA account including a rollover IRA, you won’t be able to do a backdoor Roth IRA. And you want to do this before the government decides to take away the ability to do Backdoor Roth IRA
Sounds like for you, since $12k is sitting there, it won’t matter that much for you to move it somewhere.
IRS treats 401k differently from IRA( including Rollover IRA). you can have unlimited amount of money in a 401k and that won’t affect your ability to do a backdoor Roth IRA. But the moment you have a rollover IRA, that will impact your ability to do a backdoor Roth IRA….because the IRS doesn’t treat IRA as separate accounts, it treats all your IRA accounts as 1 big account. so the Backdoor Roth IRA approach of depositing money into a Traditional IRA and immediately rolling it over into a Roth IRA won’t work since if you have any other Rollover IRA, it’s like taking a distribution weighted over all your IRA accounts in which case you’ll then owe some taxes when you do a Backdoor Roth IRA conversion defeating the purpose of it… Had I known, I wouldnt have rolled some of my Broadcom 401k out, since that plan was had a self directed option to invest a had all vanguard index funds. And my current employers 401k plan suck and not worth me rolling in all my money in rollover IRA in there. So I haven’t been able to contribute to a Roth IRA for some time now…..
Note: if you are a techie and looking for a new job, ask if your new employer is offering “mega backdoor IRA” contributions as part of their retirement plan…Zillow does as well as some.techbcompanies now…. If you don’t know what that is, Google for it.
Fidelity in general isn’t a bad brokerage , but don’t fall for their management fees. They are all trying to earn money this way now that all of them offer free trading and they have to figure out how to make.money elsewhere. They do auch better job handling overseas restricted stock then say *cough* Charles Schwab *cough*.
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