Okay, i see how it is irrelevant. My thought (at the time) was to give you as much info to see if the right ratios were in place.

Also, thanks for the recommendation for the site. I will be selling the individual stocks and using the lazy portfolio of 20% total bond market, 40% total stock market, 40& total international stock market.

What are your thoughts on amount of money to put in a high yield savings account? I've heard 8 months worth of expenses, what is the general consensus? (I currently have next to nothing)

I don't think the fluctuations are "real", because your index fund holds the stock - so it is the fluctuations of the underlying stocks that matter.

Whether that is USD1, EUR0.85, GBP0.66 does, as far as I can tell, doesn't matter. Each of those amounts are worth the same amount... and if the stock increases by 3%, then it'll be worth an extra 3% in whatever currency it is denominated in. If you start with USD1, and it increases to USD1.03, or you start with GBP0.66 and it increases to GBP0.6798, why do you care? Aren't these two things worth exactly the same, and have exactly the same impact to you?

An index fund could be denominated in camel ears, and as long as the camel ear market is sufficiently liquid, what's the advantage of having a USD (or EUR or GBP or BTC or THB) figure on your spreadsheet?

i believe this is an excellent choice. remember to stay the course!

virtually everyone agrees that you should have liquid cash on hand for emergencies. a high yield savings account is a fine choice.

recommendations range from 3-12 months expenses. this depends greatly on your situation: a single guy living with his parents needs a smaller buffer than a single mother of three small children. suze orman recommends 8 months expenses and that's what i hold.

We talked about this a little while ago, but I want to dial in our allocation for an ongoing 401(k) contribution. Our yearly contribution will be 12k and will be our only ongoing retirment contribution over the next 3 years. Other savings include 4k in a Target Retirment fund through a Vanguard Roth IRA and 10k in cash savings.

Our current allocation for the 401(k):

Target Date Fund.

Thanks. I just looked over the responses from earlier again and I see that the advice sort of converged on the Target Funds.

Question about tax deferred savings vs after tax investment:

I understand why it would be beneficial to invest in a ROTH because we take the tax hit when we are in a lower tax bracket, but that assumes something about the tax bracket we are going to be in 35 years from now, doesn't it? Namely that we will be paying a much higher rate of taxes then.

"Much higher" is the key phrase there though, isn't it, because if we aren't paying a "much higher" rate of taxes, then wouldn't there be an argument in favor of having saved our pre-tax money since it gives us a larger amount for compounding interest to work on?

Edit to ask: Is it advisable to diversify your investments among vehicles that are both tax deferred and otherwise? If so, how does one determine the allocation?

It's usually the other way around. The main advantage of a traditional IRA is that you get tax savings now, when you are likely in a higher tax bracket, and then pay the taxes after you retire, when you are in a lower bracket.

If you withdraw from your IRA before retirement, then you are likely correct, but you shouldn't need to withdraw from your IRA when you're at your max earning potential.

True, but the ROTH's interest is tax free whereas the traditional's is not.

The biggest advantage of the ROTH is that you can withdraw your principle at any time with no penalties. This is a pretty big advantage, especially for professional poker players.

Come up with whatever allocation you want across all your investments, and then put the most tax inefficient vehicles into the IRA. Generally this is bonds.

29yo
Married
2 kids
~110K yr salary. Wife is homemaker for the time being.

~75K in tax adv retirement accounts. 15K in savings. No debt other than house.

I can put back about 30K/yr right now which means I can currently stay in all tax advantaged stuff if I want (401k, roth401K, Roth IRA, ira)

I expect to continue to see my salary increase over the next 10 yrs until I top out around 200K or so. This is a lot for where I live. (Southeastern USA). Nearly all of any increases in salary would be disposable income, so the 30k/yr should steadily increase as well.

What i do now is just passively managed bogleheads type allocations and let it sit. No particular reason other than I've never taken the time to learn about investing.

I feel I should have other investments so I can retire younger than 62 or 67 or whatever it is. I want to partially retire by 50 or so.

Recommendations?

sounds like you're on the right track.

the next step is to open a brokerage account and continue investing there. this is just another account in your portfolio, so your plan doesn't change.

however, since you have to pay taxes on earnings (these investments aren't in tax-advantaged space), you want to hold tax-efficient funds. total us stock market and total international stock market are both tax-efficient, and therefore good choices.

you'll want to concentrate tax-inefficient holdings -- such as bonds (bond income is taxed at your ordinary income tax rate) -- in tax-advantaged space.

this is the key document, though it's intense at first:
http://www.bogleheads.org/wiki/Princ...Fund_Placement

Ace: I disagree with using the Target Date Fund that's offered to you.. it appears to charge 70 bps more than the stock funds you're currently in.

Would someone mind responding to these thoughts:

Given our expenses and the tax ramifications of saving in a different ways, this year, my fiance and I can afford to save either:

(1) $12,000 (all 401(k) contribution) or
(2) $8,917 ($5,500 ROTH & $3,417 401(k))
(we will ignore other combinations that don't involve max ROTH contributions)

If we assume something like a 5.5% annual return (I don't have any clue whether this is a good assumption or not), in 35 years the following will be true:

(1) We have $78,165 of which we will owe taxes on the entire amount.
(2) We have $58,089 of which we will owe taxes on $22,263.

If we do the math, after paying taxes, we see that scenario (2) only nets us more money if we have to pay greater than 35% in taxes at the time of withdrawl.

Recalling that my fiance and I, as teachers, will probably max out somewhere in the $120,000 a year of joint gross income range during our careers, I am having a hard time envisioning a scenario where we are likely to pay anywhere near 35% taxes on the income we withdraw during retirement. As a result I am having a hard time understanding why we wouldn't simply make the entire contribution to her 401(k) (or, make a contribution to a standard IRA instead of the ROTH) since, in the event we don't pay more than 35% taxes, that scenario nets us more money.

Corrections to any of these lines of thought would be greatly appreciated.

What do people generally mean when they say they hold x% cash? Would 100% be pretty much their liquid net worth, or the amount they have in their trading account?

total net worth

I didn't bother to double check your math.

One of the reasons to not put all of it in your 401k is if you might like to spend it before retirement. Like, say, for a house.

Another would be if you have crappy high-expense ratio fund choices in your 401k plan. That changes the final amount in your 401k.

Edit: Between the two of you, you could put $11,000 in a regular IRA and save yourself a crapload in expenses. That might be best if there isn't a match.

Not sure if this is the correct place for this question, but I thought some people here might have ideas.

The details:
My friend is trying to set up a new rental agreement (in California) and had agreed to meet with the landlord to sign a lease, hand over deposit etc. There had already been a listed rental price agreed upon through email and all the lease details had been agreed upon through email. When they got to the meeting, the landlord demanded a higher rent and wanted to change other aspects of the lease. My friend had spent a long time gathering the resources to pay for the deposit and organizing logistics with roommates.

The question:
Is this practice against the law or just general bad manners? I am very unfamiliar with renters laws, and wanted to know if the email agreement was binding between the renter and rentee?

Thanks for any input here. I would obviously contact a local lawyer to peruse this if people thought the emails were binding.

Thanks for the response. The bit about being able to use it for a house or something makes sense.

I'm pretty sure, since I'm currently a student (the teacher comment is about my future profession), we are only able to contribute to her ROTH.

Edit to ask: Might it make sense to just contribute to the 401(k) just to the point of the match and then put the rest in a Traditional IRA and a ROTH IRA?

Probably. Any employer match is probably going to be worth more than whatever disadvantages there are to the 401K (ie access to funds with high fees).

IANAL, but from my understanding, if your friend acted in good faith reliance on the agreement reached in the emails, then the landlord must follow through with them or he will be liable for damage caused.

http://legal-dictionary.thefreedicti...ssory+Estoppel

Edit: There might need to be consideration in this case dependent on all the facts. It looks like he has a decent case for promissory estoppel though.

Possibly. My current employer doesn't match and I am in a high tax bracket currently so I just use a traditional ira.

I'm not positive, but I think if you are married you can both contribute to an ira. You can http://www.youtube.com/watch?v=N9rJJSiUy0I. Early in your career (low tax bracket), roth makes sense.

Thanks. I'm engaged though, not married. But you're correct that if married she could make a contribution on my behalf.

Got jerked around by Vix past week. Always buying/ selling at the exact wrong time. Anyone have any Vix words of wisdom. Figured it was a viable play considering the economic times

Short version: Avoid it like the plague.

Longer version: Look at the long-term chart for it (the actual security you will be trading). Then avoid it like the plague.

Longest version: Look at the long-term chart for it (the actual security you will be trading), then try to figure out why it already isn't at the price you think it should be before you buy or sell it. Then avoid it like the plague.

Can someone help me out with this? A friend of mine sent this to me and I'd like to give him an answer as to if he is thinking about it right or not.