hi guys, pretty big noob here but been reading a lot recently. im getting 280k(pre-tax) from the ub remission any advice would be appreciated.

little about me
-34y/o
-6 year expat living in mexico (qualifies for feie)
-engaged to a national
-3 y/o daughter
-plan to live outside the usa for the rest of my life
-no debt but no savings
-already have a tax attorney (russ fox)


goals
-financial independence
-find a financial planner that specializes with financially independent expats
-legally pay the least amount in taxes as possible(willing to relocate anywhere in the world if necessary)
-max out ira
-take advantage of all deductions


thanks

not a good tradeoff

Need some help tax help here. Have a large amount of extra money coming by year end and I don't have any ideas on how to reduce my tax liability other than maxing 401k. I looked into 529 and coverdell but neither will reduce taxes, we are over the income limit. Annual income >250k so income limits hurt.

If anyone has any advice I'd really appreciate it, as the idea of just handing it to the government makes me a little sick.

This is a philosophical debate and I think it can mean a lot more than most people realize. I've heard it all my life and as I reach the halfway point in my life, with children, it's meaning has changed. Before I had children, my "quiet desperation" was not living up to my full potential (making the money I thought I should be making). Now that I have children, the meaning has changed. I'm now going to work every day and making "good" money but I wish I had more time with my children.

I think what it means is we have to find some sort of happiness with our situations. Some people are happy making 50k a year, some people are miserable making 500k a year. It's all about perspective and content with one's own life.

Spaceman Bryce, I don't know much about you but I do enjoy reading your posts. I will say that it seems you are scattered in your thoughts and it's very hard to pin down your actual goal here. From what I've read of your posts, it seems there is one thing that needs to be addressed first - what you actually want.

You have to stabilize your life first. For some people that doesn't happen until they get all of the "I want to have fun" thing out of the way. Let me let you in on a little secret - almost everyone wants to have fun. The problem is they have to find a way to incorporate that into their lives which require some sort of structure and stability.

For example, I've known people who act in a life-ruining manner in a very short amount of time (I've recently watched two good friends throw their entire lives away within 6 months), realize their mistake or had someone intervene, fixed it for a decade, and then do it again. That usually involves a vice like gambling or alcohol/drugs. Some people get past that, some people never do and are always at risk.

You have already said that college isn't for you. That's a great start because one of the things hanging you up in life is settled. Once you make a decision like that, it's one piece of the puzzle done that lets you sleep at night. Forget about it and move on, don't waste one more second thinking about woulda coulda shoulda, what's done is done.

Now what you have to do is figure out what you want and what you're willing to do in order to achieve it. For example, if you are a person with hopeless vices like alcohol or drugs and it will always lead you to losing your job or being arrested, I would say concentrate on achieving a situation where you can live some sort of acceptable existence in relative safety within the confines of those limitations.

If you are a person who is ambitious, but have no discipline, you need to find a job that caters to your sense of "fun". Something like a night-club promoter or a job in the service industry, such as a bartender at a good place or a door-man at a nice hotel, or even a hair-dresser at a good salon. All of those occupations can make surprisingly good money if you can get in the right place and have the right personality. If you are a person who likes to party and wake up at noon to be ready for a 3pm start of a shift, those jobs might be much better suited for you (I had a blast doing those jobs).

My point is you need to figure the most important part of this equation - you. Find an inner peace and accept who you are. Not everyone is an accountant just as not everyone is an artist just as not everyone is a kindergarten teacher just as not everyone is an underwater welder. Yes, many people do not realize you can be paid to hang from the side of a helicopter working on power lines just as you can be for doing another person's tax returns. I remember talking to a guy at an airport who worked on a deep-sea rig in the Gulf of Mexico who lived in Maine. His schedule was 1 month on / 1 month off. It boggled my mind that any human being could work that schedule. (He did mention he made 200k a year).

Find the type of role you can live with, get good at it, and then maximize that situation. You may eke out a living being a bartender at the local Applebee's, but you'd make a lot more money being a bartender at Capital Grille.

Make it happen.

Hope this isn't out of place.

I have some money in a TD Ameritrade account. I opened the account because I wanted to create a track record through sourcing my own investments rather than just dumping everything in an index fund and letting it ride. I recently sold my last position that I had opened so I'm currently 100% in cash.

I don't have any ideas right now so I wanted to put it somewhere that it'll generate something. I was thinking treasuries? I admittedly don't know a lot about treasuries or how to invest in them.

If I believe that interest rates are going up in the next few months, is it generally a bad idea to invest in treasuries right now?

And/Or, where would I best park my money that is liquid enough that I can generate some income in the very short-term and then eventually flip it into a stock investment?

On 529, I assume you live in a state that doesn't give a deduction?

Honestly, at some point there really isn't much you can do but pay. Can you get the money coming in structured across tax years?

If you do charitable giving, you might consider accelerating that also. You could even do that through a Donor Advised Fund potentially if you want to still spread out the giving, but get the deduction now. Kind of depends on the money involved obviously.

If you really want to do 100% bonds, just go with something short-term in duration to mitigate the interest rate risk. You could look at something like a Short Term Investment Grade fund, or Short Term Gov't Bond fund.

If you are cool with more risk than pure bonds, you could go with something like a balanced fund and pick whatever exposure to equity you want.

I live in PA and from what I read 529 won't help our tax situation.

I'm almost desperate. I see no way to reduce my tax liability except maxing 401k, which I don't even really want to do but it's better then letting the government just take it. I pay about 38% in taxes.

I really can't get over how much I'm going to just "lose". I mean, it's a good problem to have but this is absurd.

Thanks for your post wil I can't really respond on my iphone 5. Later.

I just wanted to say there's a limit to how much I can learn about investing because I hate math. So I will always be in asking mode instead of telling mode on this forum sorry .

I've just been thinking about how someone like Buffett says his cash is in treasuries right now. I don't know what he is invested in, though, so I don't exactly know where to look.

I'll take a look around TD Ameritrade and see what they have. I don't mind being in cash, but I'd like to have the money working if the short-term risk is limited and still have the liquidity to move the money into stocks when I'm ready to invest in a company. I don't know when or how long it'll take to find a company to invest in so the time frame is uncertain.

I don't think I get money very well socially I know jalexand is the one giving advice but I have no idea what Italian FX Is talking about either. Ok goodbye.

I've been investing in the stock market for the past 14 years and I am still learning. My main area of expertise is the stock market and value investing. I know very little about bonds, which is why I am asking.

A bond is like a loan that you give to someone in return for them paying you interest in return. I might give you a 5 year loan and in return you pay me 3% interest every year. At the end of the 5 years, you give me the money back. That is a simple explanation of a bond.

Treasuries are mainly just something similar that are issued by the government so they can generate revenue. Treasuries are considered safer because they are issued by the government.

100% in cash/bonds is really bad (unless you know what you're doing timing the market I guess, but since you have to ask here.. you don't). Just put it in an index fund -- that's plenty liquid, so you can easily flip it into individual stocks later on.

Why does no one listen to Bill Ackman about Herbalife?

He gave that huge presentation years ago, got laughed at.
Created a documentary about it, got laughed at.

I kinda hate the guy myself but do people really just not respect his opinion at all?

yeah really good points. In short term Im going to try to write some novels and then if that doesn't work aiming for bartender at capital grille and things like that is probably a good direction.

I think i knew this in the back of my mind somewhere , but if someone asked me what are bonds and treasuries I don't think I could have answered. but reading this I thought to myself, I knew that!

I do have some money in the stock market. it through a traditional ira. The only stock market pick i have ever made is general mills. I have read some financial articles here and there and it is my understanding that for someone like me buy and holds pretty good like im not going to make any money day trading. I have 5k i could buy with stocks but dont know what i want to get. I kind of wish i could just poof put that money in my hands right now because i actually need it but ive been advised against this.

Heh. Don't take things too literally. I just mean take one step at a time and have a plan. Everyone has different things that work for them, do what works for you. We are all different people and it wouldn't make sense if we all did the same things. You can do it.

There is nothing wrong with throwing it into an index fund. I've been transitioning my Roth IRA over to only the S&P500 index fund. I used to buy stocks, and have done really well, but decided it would be better to be more defensive.

I'm not really sure why some people constantly invest in the hottest trend stocks. There are a lot of companies out there that are smaller and undervalued. It's really the only way of individual company investing that makes sense to me.

So in PA, you can save state income tax (~3%) on a $28k annual contribution to 529 accounts (assuming you are married & filing jointly). So basically saving $850 in income tax, assuming you plan to save for kid(s) college. I personally have taken advantage of this where I live until I built up my target in 529 accounts for my kids.

Why would you not want to max out 401k? *confused*

You should also almost certainly be doing a backdoor Roth for you/spouse, depending on what IRA assets you currently have.

The other thing that's a no brainer for high income is using a HSA health plan and treating your HSA account like it's an IRA (in other words, not reimbursing for medical costs, instead investing the max HSA contribution annually).

The above + significant charitable giving is exactly the things I do personally. Beyond that, I have no ideas and I feel your tax pain.

Replying to a few your posts in one:

1. You can't compare your situation to Buffett, especially regarding cash. Berkshire is a completely different animal. Listen to what Buffett says is correct for the average person, which is to buy index funds.

2. I personally hate the strategy to put everything in the S&P (I think this is even Buffett's advice even, lol). I am way more in favor of something that provides way wider exposure to small/mid cap and international stocks. I would much rather see someone go all in on a Target Date fund than the S&P 500.

3. I also personally hate anyone but an expert picking individual stocks. It's straight up gambling for the average person. When I first started investing, I did alot of this...and I paid dearly both in real money at the time and now in significant opportunity cost in hindsight. Thankfully I learned my less and am doing things way smarter now with way bigger $ at stake. Indexing is boring boring boring compared to picking stocks...but....your goal with investing is to be AVERAGE and to plan your strategy around expected average returns. This is one area of life where taking risks that ultimately cause you to see inferior results in the long run is catastrophic (assuming retirement is a real goal). If most professional stock pickers can't beat an index fund strategy, what makes an average joe think he can?

Hope this helps!

jalexand42, isn't it also possible that an average investor might only have time to research a few companies and my understanding is that in the long run a copmpanies success in stocks is largely tied to its growth and profit. i mean obviously i could be wrong but thats what i think.

Thanks for the reply! It is much appreciated!

I know I can't compare myself to Buffett. I did some research on the treasuries and ultimately decided not to do it. It's not worth it to me and just isn't my style of investing. I am going with a Total Stock Market fund and will let it sit there invested while I source and research my own ideas.

A lot of my money is spread out in different accounts. I have the Roth IRA, which is mainly invested in the S&P500. I have a 457 Plan, which is in a Target Retirement Fund. My work also has a pension, which is actively managed and invested in equities and bonds. And then my side account, which I started for the purpose of investing in individual companies. It's not meant to be my sole source of retirement money or the main investment account. It is a very small percentage of my overall assets so I'm doing it more for myself and how I would like to approach the market. Some people may believe it's gambling. I think people gambling on the market are those trying to ride the waves in Apple, Facebook, or Tesla. My approach is more toward looking for value/undervalued companies and the past 4-5 years have done well for me.

So yeah, with that said, I completely agree with you. Thank you!

If you are thinking of predicting the long run preformance of individual companies its incredibly difficult the farther out in time you go. Kmart was the first and largest discount retailer long ago before Walmart and target. Great company. They went bankrupt. The stock became worthless. Lucent technologies, newspaper companies, Eastman kodak etc etc. Even monopoly utilities can get into trouble. You cant predict the longterm future of a company w high certainty. Its the nature of competition. Its the nature of capitalism.

If you're super interested study and go 99.5% passive w index funds and buy and hold .5% to 1% in a few indiv stocks.