It seems to me there are two ways to live your life.
1. Save no money, buy no insurance, and hope to use the public hospital in the event you get a life threatening disease or accident.(I'm not advocating this, but I believe about 20% of the US population essentially does this)
2. Save and invest money, and get insurance that at a minimum covers events over 10K.

The worst spot to be in is saving money and not buying insurance, as they will wipe you out before you can start to use the public services.

Neither. Invest the money into a target date fund with Vanguard or Fidelity.

Not sure if this is the right thread for this and I know I probably didn't do this right but I'm going to be getting a closer bonus where I work. Somewhere in the range of 60-70k after taxes. I have everything including my home paid off and a small amount in savings <20k. I didn't do great with my 401k but it's got a decent amount in it. I also have a small pension but I can't collect the monthly payments until I'm 65. I need to work another 15-20 years but it really doesn't matter where as I have very little to expenses. Any advice on what I should with the bonus money?

I did some research and just wanted to confirm that with an SEP IRA I will not be able to withdraw my principal contributions tax free like I can for a Roth. Is that correct?

For example, in a Roth, if I have contributed 20k and the balance is up to 28k, I can withdraw up to 20k tax-free, since this was my principal investment.

But the same is not true for an SEP? Anything put into that account has to stay there until the age of 59 1/2, otherwise I will be faced with a 10% tax fee.

If I were you, I'd definitely do that.

I'd just drink more Beer.

what bank should i put a 100 dollars in?

Piggy

Gee thanks jerks.

Discover

You can open an account very easily online (with zero money to deposit required - if I remember correctly).

There is no monthly fee for their checking/debit accounts, or for their savings accounts.

They will also send you a starter packet w/ free starter checks & a debit card.

They have "partner" atms everywhere and an online map so you know which atms they are. As long as you use on of those partner atms there is no fee for any transaction.

They give you cashback rewards for writing checks and autpay bills I think. It's very little like $0.10 per transaction or something but it's better than a poke in the eye.

They have a savings account you can link to your checking account that is currently paying 2%. That's pretty decent for free accounts w/ the services they offer.

Just wondering if anyone knows how brokers usually handle assigning stock when you’re in a vertical options spread that has gone against you. Say you put on the following trade:

Sell SPY Dec 7 $280 call @ $1.50
Buy SPY Dec 7 $283 call @ $0.70

Your max profit is the credit x 100 shares or $80 and max loss is the difference of the strike spread x 100 less the credit or $220. At least, this is what Investopedia tells me.

So let’s say SPY is trading at $275 and rallies up to $281 by the expiration date. If you fail to close out the trade, will you typically get assigned -100 shares of SPY and if so, does the broker exercise your long call and then you have to pay the full difference? ($28,300-$28,000=$300)

No.

283 will expire and you are stuffed with the 281 +/- whatever SPY opens at the following business day on margin, and if you don't have enough margin you will eat a house margin call or be forced to cover it depending on how much it moved + pay interest on the margin borrowed for the day.

You can imagine the potential liability that could occur if say, you get stuffed and then SPY moves 20-30 pts (very unlikely, but not 0% chance). So it is important to always close out your spreads to avoid the possible tail risk.

Gotcha. Thanks for breaking that down.

Funny how none of the informational articles or how-to YouTube videos talk about that potential liability

Don't know about less sophisticated brokers, but IB will generally sell the options before expiry if your margin isn't sufficient to hold the shares through the weekend.

Definitely with a less sophisticated broker - Robinhood. I suppose it’d be best to contact them to get clarification.

Which brokerage do you guys like best for IRA's? Schwab has made some strides to compete with Fidelity and Vanguard. Is there too little difference in the three of them to worry about? I like the non-profit aspect of Vanguard, but their customer service is a bit lacking from what I have read. It looks like all three have similar low cost three-fund index funds. My OCD wants more info than just flipping a three-sided coin.

Not sure if this is the place for it, but I'm looking for some help on fundamental valuing of companies. I'm working on calculating P/E and P/BV ratios from income statements and balance sheets and I keep hitting road blocks. (It also looks like every site has different values for these ratios. Hard to know the proper formula.)

Here's the current one I'm working on.

FDX

Market Price= 230.15
Net Income (year)= 3,970,834,000 - (div paid 606,096,000) = 3,364,738,000
Equity= 12,304,000,000
Shares Outstanding= 263,520,000

Yahoo Finance Numbers:
EPS= 17.715
P/E= 12.99

Solving without removing dividends

EPS=NI/SO
=3,970,834,000/263,520,000=15.07

P/E=MP/EPS
=230.15/15.07=15.27

Rerunning after removing dividends paid for the last year:

EPS=NI/SO
=3,364,738,000/263,520,000=12.77

P/E=MP/EPS
=230.15/12.77=18.02

Book Value:

BV=EQ/SO
=12,304,000,000/263,520,000=46.69

P/BV=MP/BV
=230.15/46.69= 4.93


So as you can see both of the P/E ratios are off and on the high end. Can anyone tell what I'm doing wrong here?

If you're not trading options, Merrill Edge is pretty sexy since you get 30 equity trades commission free if you have >$50k with Bank of America. Assuming you are only going long index funds or other commission-less instruments like treasuries, it can save you a lot of money.

You can keep depositing each month and then cost average down on whatever you are holding without commission.

I have ira accounts with Schwab and vanguard and I like them both just fine. I've been very pleased with vanguard customer service. I've called many times and never had an issue.

Looking for some advice/comments on my current financial life.

28 years old. $100,000 salary (just promoted from $80k). I’ve been in the work force for almost 4 years and have doubled my salary since then. Married to my wife who is 26 and a teacher; makes $45k.

I’ve got $30k in a 401k and $10,000 in an HSA. I currently max the HSA and contribute 5% to 401k for the full match. Together my wife and I have $10k in credit card debt that will be paid off in 3 months and $40k in student loans that are 4% or less interest. We rent an apartment for $1300 a month. Just paid for the wedding and honeymoon this year, so no more major expenses except for a house in the future.

My plan is to start maxing my 401k in March. Putting $2000 a month towards a down payment on a $350,000 house over the next 2 years and pay the minimum on the student loans. Once the loans are payed down I’ll take that money and put it towards an IRA. I feel like I’m doing pretty well at this point and my plan makes logical sense. Would love to hear differing opinions if I am wrong.


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Yahoo, confusingly, calculates annual EPS by taking the last quarter's EPS and multiplying by 4. It calculates P/E by taking the TTM EPS and dividing by share price.

Don't remove dividends when calculating P/E. Divs are money the company earned and they belong in that calculation.

dont see any issues. Would think you need to make your #1 priority eliminating credit card debt - as well as never taking on credit card debt in the first place - but you seem to know that.

Yup. Was a combination of mistakes and necessity. Won’t happen again. Thanks.


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I would pay off credit card and build a liquid emergency fund before increasing 401k beyond match.

Looking good, riddle. You and the wife should both max ROTH IRAs if you don't have that setup already. If you can live on her salary, you can crush debt, retirement, emergency fund, and house down payment pretty quickly.