How the wealthy allocate investment

You trust gov not to rape you later more than I do!
I'll take the 15 percent in my pocket on day 1
Plenty of ways to not pay them later
 
If we reach a point in time where the government is looking to double-tap Roths, then it will be when the economy has imploded and a revolution is about to brew. A more realistic map is one where I go to take my money out on a day when young whippersnappers are getting raped for putting their money in. Of course, they might all just abandon Roths and gamble that the tax on Traditionals will come down someday...
 
No you are safe as hell
Your the only person I know with a Roth
Mathematics has you coming out ahead long term
You'll be in a higher bracket when pulling out
 
The Dude said:
No you are safe as hell
Your the only person I know with a Roth
Mathematics has you coming out ahead long term
You'll be in a higher bracket when pulling out
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When I was in college, some business students put on a seminar, and they explained that younger people were basically a huge target audience for Roth investments. Roths are really coming along, now that the annual contribution caps on them have slowly risen to be about the same as Traditionals.
 
I tell my son to up the contribution a little each year out of his raise.
That way you eventually max out while still making more each year.
 
The Dude said:
I tell my son to up the contribution a little each year out of his raise.
That way you eventually max out while still making more each year.
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That is good advice. Always contribute up to the match and always put raises in.

I don't trust the government therefore I don't trust them on a Roth. However, they can just as soon decide they are gonna go after traditional IRAs too

Have you seen the congressional testimony of that broad that said the government t should just take everyone's 401K and IRA and give out distributions and make it more fair.

I am not making this up. There are people that think that
 
I Love America said:
That is good advice. Always contribute up to the match and always put raises in.

I don't trust the government therefore I don't trust them on a Roth. However, they can just as soon decide they are gonna go after traditional IRAs too

Have you seen the congressional testimony of that broad that said the government t should just take everyone's 401K and IRA and give out distributions and make it more fair.

I am not making this up. There are people that think that
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One of my sons is trying to do what you did. He's doing remodels now, wants to buy rehabs and rent them.
Hitlery is trying to kill pfizers deal, hypicracy reaches new high
 
The Dude said:
One of my sons is trying to do what you did. He's doing remodels now, wants to buy rehabs and rent them.
Hitlery is trying to kill pfizers deal, hypicracy reaches new high
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Tell him to pay attention to cap rate. Also tell him to get to know buyers. You would be surprised how many people will finance. You can offer them a better rate than they get from a CD or a bank and you are paying less than the bank will charge you.

For example offer them their full price if they finance at say 4 or 5%. But if they need the equity right away, that may not work.
 
I Love America said:
That is good advice. Always contribute up to the match and always put raises in.

I don't trust the government therefore I don't trust them on a Roth. However, they can just as soon decide they are gonna go after traditional IRAs too

Have you seen the congressional testimony of that broad that said the government t should just take everyone's 401K and IRA and give out distributions and make it more fair.

I am not making this up. There are people that think that
Click to expand...

By the time they come to double-tap Roths, they will have had to destroy everything else, as well. Jacked up Traditional rates and Roth investment rates, matched stock receipts to income tax levels, screwed more with SS, etc.
 
Threedee said:
By the time they come to double-tap Roths, they will have had to destroy everything else, as well. Jacked up Traditional rates and Roth investment rates, matched stock receipts to income tax levels, screwed more with SS, etc.
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Don't be so sure. They don't ever come for things all at once. First it starts with stories like "only X% participate in Roths and 401Ks and it only "helps the rich". You may have already seen articles like that band of course when thinly confiscate them they won't call it confiscation. It will be deemed as mandatory participation in a government run 401K and you won't be at the whims of evil Wall St and they will guarantee you a certain return. All you have to do is let them take care of it. They will make it sound very good just like government run healthcare. Just like you aren't smart enough to handle your own healthcare you won't be smart enough to handle your own retirement
 
Threedee said:
It means professional engineer. It's like passing the BAR or taking the CPA, in that most (if not all) engineers need the certification. Once they have it, though, they are more liable for their work, I'm told...
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Govco's require plans to be "sealed", meaning the PE's stamp, or seal, is applied to the drawings. That PE then becomes the "engineer of record" for those plans and is legally responsible for their correctness. He must maintain copies of them and all related material for at least seven years. His liability for them never goes away.
 
FRight said:
Govco's require plans to be "sealed", meaning the PE's stamp, or seal, is applied to the drawings. That PE then becomes the "engineer of record" for those plans and is legally responsible for their correctness. He must maintain copies of them and all related material for at least seven years. His liability for them never goes away.
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How's that PE?
 
I Love America said:
Ahhh the set it and forget it approach.

You know it is kind of funny. If all people have to do is put their money into SPY and sit on it, why is there even a need for financial advisors? Seems like a pointless career to me
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I know we have spiraled into a bit of the "financial adviser" role, and that is the last thing I would want to do for anyone online - there are probably billions of "investment advice" posts online from anonymous strangers, and if someone really did figure it out, they would bottle it, we would drink it and we would all be billionaires. What is incontrovertible, however, is math and some mathematical principles apply here that are really quite simple to grasp.

When I said "don't touch it", I did not mean "set and forget it" - far from it. In layman's terms, I meant "don't withdraw from the ATM" - let the investment compound and do not sell small parts of it to go buy a Harley or Winnebago. You are stunting or destroying the whole elegant curve of exponential growth, and that is what separates a half-assed day trader from someone who might actually have an impressive portfolio over time. Unlike casino gambling, you actually have pretty iron-clad economic growth on your side the longer you stay at the table (provided we don't enter some Islamist-inspired dark ages anytime soon).

I also mentioned "balancing your portfolio". This is where perhaps the savvy and the "trial and error" come in - if you indeed hold 70% of what you invest in equities, not all equities (or more likely, funds with equities) are created equal. Personally, I balance what I have about once a month (barring oddities in financial markets), maybe spending a few hours with the collected thoughts I have and the opinions of others I might value. There is no magic formula, but we all have a different risk profile, understanding of investments, and perhaps sophistication in knowing what the numbers really mean. A shift from Mid-Caps to internationals. Maybe you overweight mining stocks. Maybe you like North American tech. It can be as simple as a reasoned hunch, or it can get into more sophisticated understandings of individual stock risk premiums. As you learn more, you get the math more, and you make smarter decisions in the long term.

Which takes us to the SPY - you can do a lot worse than dumping your money there and saying "peace out". You are essentially betting on the corporate profits of large American companies, and we are good at trimming dead weight at rewarding our shareholders (unless perhaps you are GM). And yes, indexed funds are taking an increasingly larger share of the US investment pie over managed funds - they are often more stable and most importantly, they have low fees. Instead of giving 1% annually to a international growth fund picking esoteric investments, the Vanguard SP500 takes .17% and invests in the most ironclad thing out there - America's biggest companies. As I mentioned earlier, there is a mathematical imperative to invest outside of one single investment, but there is nothing wrong with making this the biggest part of your pie.

Paying somebody to manage for you is stupid - unless you are extremely rich, legitimately have no time to manage or deep interest in your assets, are under IRS investigation, or are trying to hide assets from your soon to be ex wife.

The point is, Mott is a smart man, but he is not a partner at a Hedge Fund, and should not invest like one. Nor, like you said, should he buy into simplistic slogans about the stock market and just trust the hidden hand of Adam Smith. A 70/30 split of equities and fixed income is a great long-term, risk averse investment strategy, and letting that slide on occasion to 65-35 or 75-25 is no biggie. Shit, buy a house on the side if you get the loan, but treat that as a risky field bet - far better to just buy the performance of people who do that for a living through a REIT. Don't pay some dipshit who went to a 6 week class to manage your money - you are giving him a percentage of your portfolio every year to end up buying whatever shitty mutual fund his regional manager has a quota to sell.
 
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