The Investment Thread (help with savings, stocks, retirement funds, etc.)

[bustedstuff88]

Originally Posted by UCFish

So I just moved and I am planning on buying a new home....Have a couple questions. The money that I put in a Roth IRA (that has done basically nothing) 2 years ago I can take out the principal with no penalties correct? I am trying to do this for a down payment and get to the 20% to not pay PMI. My second question is about year end taxes. I put all my savings in a market index account with Vanguard which is up about $1250 since inception. I am going to remove most of this account for the down payment which includes the gains. I also have TERRIBLE US Oil Stock which is down about $2200 from when I placed it in. Will the losses in the Oil Stock offset the gains in the Vanguard account? Trying to decided if I should just sell the stupid Oil Stock so I never have to see it again and every dollar is less I would have to pay back to 401K borrowing which I need to do a small amount for to finish the down payment.

Hope that all makes sense and thanks for any advice.

If I were you id keep the oil stock.....getting rid of it now would be selling very low. Oil will bounce back. Offload it when it does.

[bustedstuff88]

Originally Posted by AJF_41

link?

i find it hard to believe there is a product today that offers 6% annually (risk free, or at least the risk of a CD, which is basically 0)

.6% is what I meant to say. That little dot makes it more believable, eh?

My bad. For comparisons sake, on a 1 year term, a CD would yield .33%. A lot of people use this type of account as a "Christmas club" type or a tax account. Its an internally held savings account so there is absolutely no risk.

If someone is wanting to make a jumbo deposit (over 250K) we do bid rates but last one we gave was 1.85% so still not anything you will get rich off of.

[Nick@Night]

Originally Posted by YouNeverKnow25

I'd look into LPMI rather than taking a withdrawal from my roth IRA but that's just me

Originally Posted by ryguy469

As a former mortgage banker, I too would look into LPMI over withdrawing from the Roth IRA

Yes. This.

[YouNeverKnow25]

Originally Posted by AJF_41

link?

i find it hard to believe there is a product today that offers 6% annually (risk free, or at least the risk of a CD, which is basically 0)

it's called Sendrax

[AJF_41]

Originally Posted by YouNeverKnow25

it's called Sendrax

isn't that the new dmb tune where dave plays the piano?

[UCFish]

Thanks guys....I had never heard of LPMI. I appreciate it.

[Tiduwho]

Don't you generally end up paying more with LPMI? Higher interest rate that lasts for the life of the loan instead of just 80% LTV?

I think you have to formally refinance just to get out of it, and unfortunately when you are ready to lose it in however many years it is more likely you'd be refinancing into a higher rate than lower.

I think regular PMI would just drop off at 80% and you'd get to keep your historically low interest rate that you'd have today?

[YouNeverKnow25]

depends on what product you use, as to whether PMI just drops off.

the increased rate for LPMI is only a quarter point, so if you "have to refinance" to "get out of it," and you're "likely refinancing into a higher rate than lower," you could always just....not do that

[Tiduwho]

Just a quarter point? That seems like a no brainer then.

[YouNeverKnow25]

it might not be that low in every situation, that was just mine so everyone else's mileage will vary

[UCFish]

Ok so just did a little reading....I basically have a difference of 20k between what I have and what the 20% down is give or take a little bit. 45k vs. 64k down payment. It seems with that "small amount" I might just be better off with normal PMI vs the LPMI since I have 70% of the down payment. I guess I will leave awful Oil stock and Roth IRA alone for now.

How much is it frowned upon to borrow the additional 21k from my 401k (which is pretty healthy for my age) or just pay the traditional PMI.

Thanks for the help everyone I really appreciate it.

[Tiduwho]

Depends on the specifics at the end of the day. I wouldn't want to pull money out of a retirement account, but maybe borrowing against a portfolio shorter term could make sense over PMI? You'd have to run the numbers. I think my Edward Jones is just a no strings line of credit at 5.5%. Provided you are well below the 50% mark, you wouldn't have to worry about calls. Many people use that type of thing for margin, but you can use the dollars for whatever you like.

So for a down-payment, I could tap that if it makes more sense than PMI. Temporarily obviously, and spare dollars would go towards it til you are even.

So 5.5% for x amount of dollars versus 3.5% + PMI to cover those same dollars?

No idea how the math comes out and I'm not in the market for a house right now, but this is another option for people to look into.

[Nick@Night]

Originally Posted by YouNeverKnow25

it might not be that low in every situation, that was just mine so everyone else's mileage will vary

That's what mine was. Saved me nearly $100/mo on my escrow payment versus going with a lower IR and BPMI.

[YouNeverKnow25]

there are tax factors as well. PMI may not be tax deductible for you (phases out completely at 109k agi); a stepped up interest rate for LPMI would be deductible

also, assuming you'd put every dollar into a down payment in the situation where you are paying less than 20% is faulty; it's more advantageous to you, after you've determined that you aren't getting to 20%, to pay as little as possible b/c mortgage borrowing in today's climate is extremely cheap on the front and back ends

[Nick@Night]

Originally Posted by YouNeverKnow25

there are tax factors as well. PMI may not be tax deductible for you (phases out completely at 109k agi); a stepped up interest rate for LPMI would be deductible

also, assuming you'd put every dollar into a down payment in the situation where you are paying less than 20% is faulty; it's more advantageous to you, after you've determined that you aren't getting to 20%, to pay as little as possible b/c mortgage borrowing in today's climate is extremely cheap on the front and back ends

That's another reason I went with LPMI. Wish it was that I made too much, but the possibility it wouldn't be deductible at all in the future made me uneasy.

[unccrombie]

let's talk phase outs and how they should be locality AGI based on not US AGI based.
fucking miserable.

[justink]

IRA help?

i just threw this year's $5500 in (Fidelity).

I had $5500 in FSTMX from last year.

What should I put this year's $5500 in?

Thanks.

[AJF_41]

Originally Posted by justink

IRA help?

i just threw this year's $5500 in (Fidelity).

I had $5500 in FSTMX from last year.

What should I put this year's $5500 in?

Thanks.

FSTMX is 100% US equities...maybe something for diversified, but broad based?


https://www.spdrs.com/product/fund.seam?ticker=GAL

[Route_2]

Originally Posted by AJF_41

FSTMX is 100% US equities...maybe something for diversified, but broad based?


https://www.spdrs.com/product/fund.seam?ticker=GAL

Fidelity let's you trade their own funds at no cost, correct?

If so, you may want to stay in the Fidelity fund family, but take Adam's advice and diversify outside of the US market. FTIEX looks like it would accomplish that goal. I have about 20% of my allocation in the developed international markets for reference. Not sure what percentage of your overall allocation $5500 would be.

[Benny003]

Originally Posted by justink

IRA help?

i just threw this year's $5500 in (Fidelity).

I had $5500 in FSTMX from last year.

What should I put this year's $5500 in?

Thanks.

A mix of S&P 500, international, and bond index funds and then forget about it. The combined international and bond allocation should be about equal to your age (bond allocation should be lower than international, but not a lot). The rest should go in the S&P 500 index fund. My 2 cents anyway. If you want to try to beat the market, then you can do virtually whatever you want, but more often than not most people can't beat the market over the long-term.

[justink]

That's all Greek to me guys. Can you suggest three or four funds to break it up into with percentages? Thanks.

[mcwyffe]

Fcntx. All of it

[Route_2]

Or just buy more FSTMX.

Many of the large cap (big) companies held in your total market fund do a significant amount of business overseas so you effectively already have international exposure in your current fund. If you're not retiring anytime soon you don't need too much (or any) bond exposure (I don't have any). Plus international funds are more expensive as it costs more money to trade in foreign markets. Just keep doing what you're doing for now if you don't want to spend your time to learn more about investing.

[justink]

What about FOCPX?

I moved half to that.

FCNTX looks good though too.

[Benny003]

Originally Posted by justink

That's all Greek to me guys. Can you suggest three or four funds to break it up into with percentages? Thanks.

I Googled "best mix of Fidelity Index funds" and here are two links that came up:

http://investorplace.com/2016/06/3-b.../#.V8CDZK1BktM

http://www.kiplinger.com/slideshow/i...1-k/index.html

For percentages invest your age (say 30% if you're 30) into one bonds fund (some suggestions for the names of the funds are in the links above). The remaining percentage can be split between the S&P 500 index fund and the international index fund (again, suggested index funds are in the links above). Put 75% that remaining percentage into S&P 500 and 25% of it into international. So if you're 30 years old, the breakdown would look like this:

30% bonds index fund (FBIDX)
55% S&P 500 index fund (FUSEX)
15% international market index fund (FSEMX)

*I am not a financial advisor. Use at your own risk.

[NKAWGNEATO]

Can somebody school me on rolling over an old 401-k plan into a new one?

I was on the phone with Fidelity and they said that if I want to rollover an old plan, I have to call the old vendor, have them cut a check that needs to be made out in a very specific way, the check comes to me at my house and then I need to send it to Fidelity with a special form. I think Mercer said the same thing as I have a small plan there if I want to rollover with them from my old place.

Why can't they just wire from one old account into a new one? ACH debit and credit. What's with this cutting checks stuff in 2016 and sending, then resending? I guess for 401-k plans it needs to be done in a specific manner. Not sure why.

[justink]

Originally Posted by NKAWGNEATO

Can somebody school me on rolling over an old 401-k plan into a new one?

I was on the phone with Fidelity and they said that if I want to rollover an old plan, I have to call the old vendor, have them cut a check that needs to be made out in a very specific way, the check comes to me at my house and then I need to send it to Fidelity with a special form. I think Mercer said the same thing as I have a small plan there if I want to rollover with them from my old place.

Why can't they just wire from one old account into a new one? ACH debit and credit. What's with this cutting checks stuff in 2016 and sending, then resending? I guess for 401-k plans it needs to be done in a specific manner. Not sure why.

Yup. I did that with fidelity about 10 years ago. It's not really as bad as it sounds. Worked fine. Just a minor hassle.

[justink]

Originally Posted by Benny003

I Googled "best mix of Fidelity Index funds" and here are two links that came up:

http://investorplace.com/2016/06/3-b.../#.V8CDZK1BktM

http://www.kiplinger.com/slideshow/i...1-k/index.html

For percentages invest your age (say 30% if you're 30) into one bonds fund (some suggestions for the names of the funds are in the links above). The remaining percentage can be split between the S&P 500 index fund and the international index fund (again, suggested index funds are in the links above). Put 75% that remaining percentage into S&P 500 and 25% of it into international. So if you're 30 years old, the breakdown would look like this:

30% bonds index fund (FBIDX)
55% S&P 500 index fund (FUSEX)
15% international market index fund (FSEMX)

*I am not a financial advisor. Use at your own risk.

Thanks Jets. I'll look into that a bit

[rconverse]

Two words: Kitten Mittens

[justink]

Originally Posted by rconverse

Two words: Kitten Mittens

is your cat making TOO MUCH NOISE all the TIME?

is your cat constantly stomping around, DRIVING YOU CRAZY?!