Hello all -

My names Rafe Kibrit and I too suffer from Black Friday PTSD. After deciding against relocating out of the country, I've stumbled into the world of finance and accounting. As I begin my own business after working in public accounting, my main goal is to educate my clients about not only their business, but their personal finance. I believe the lack of curriculum dedicated to gaining financial literacy through formal education is one of the main reasons many educated individuals struggle when dealing with how to invest, understanding basic taxes, time value of money, etc.

As I begin my journey in spreading financial knowledge, I'd love to give back to the poker community. While not active on the forum - I definitely can credit a lot of the (previous) poker skills to twoplustwo hand breakdowns.

With that said - ask anything poker regarding either your 2021 taxes (due May 17!) or poker related taxes in general.

And if you'd like to discuss your personal situation further - feel free to PM me!

I'm about to have $47k in the bank from my house sell and savings. Was out of work for a year and went through the majority of prior savings.

My debt-student loans:
$7k-10% interest (private)
$6.5k-9.8% interest (private)
$6.5k-6% interest (private)
$9.5k-6.9% interest (private)
$69k-$5.5% interest (government)

I live a pretty frugal lifestyle and will be able to save 39% of my income over the next year (not including 6% into 401k).

I've always bought cheap second hand furniture and want to spend about $4500 on new furniture this year for the first time.
And, I want the start allocating $5k/yr to vacationing which I have never done before.

What should I do with my money as far as investing, safety net, and paying off debt?

I've opened a Robinhood account and acorns and have about $5k there. Just playing around and investing in some energy/electric car/lithium battery stocks.

MLY,

Close the Robinhood account and buy some bitcoin on cashapp. Move it to a hardware wallet. Hold and never sell. More on this in an upcoming thread, but defiantly start now. Your daughter will be able to retire by 30. Easily.

:Thumb:
I had never heard of a hardware wallet and didn't know you could buy on Cash app. I've watched a few explanation videos before and don't really understand cryptocurrency either lol.

Don't miss the ethereum wave bro, but do sell before the GUBMINT brings all this to a halt.

While ETH is making a lot of millionaires right now(and more), it will still end in a bagholder scenario eventually. It was a mostly pre-mined coin and devs also have the ability to change the terms at any time, plus a couple other items that make it closer to doge than btc. Doge has made many millionaires as well, but it is a literal memecoin that will be a massive bag-hold bloodbath sooner rather than later.

And the gubmint will not be bringing bitcoin to a halt. Virtually unpossible. Do I suggest you move to your own personal cold storage wallet? Yes. Could the gub **** with it while it is on and exchange or held custodially(cashapp, coinbase, etc)? Yes.

But can they **** with it if you have it in cold storage? No.

Hey - thanks for reaching out. Great job on developing and implementing a savings plan!

Student Loans - I'd first start worrying about paying off your bad debt - mainly the ~13.5K at 10%. Have you looked into refinancing your private funds? Once you're able to lower your rate closer to 5/6%, I'd then focus on simultaneously building your asset base while developing a payoff plan to pay off the rest of your loans.

Safety Net: I recommend 3 months worth of expenses as an 'emergency fund' (rationale behind this is median time of unemployment in US is 3 months). The emergency fund should be in cash/cash-equivalents. Then, depending on your life situation (kids, single v married, etc.) I'd generate a safety net of 1-3 months. Rather than holding this amount in cash and running the risk of losing purchasing power due to inflation - I'd advise investing in a low-cost, globally-diverse portfolio weighted more towards bonds than equities (70/30 or so).

Investments: What's your time horizon and what account are you investing in? These two questions will help determine the level of volatility you can withstand and most tax-efficient account to use. EX. REITs perform better in tax-free or tax-deferred accounts since the 'dividend' from REITs are taxed at your ordinary income rate, not capital gain rate (QBI helped, but still not as efficient). On the contrast, municipal funds work better in a taxable account (and are more beneficial the higher your tax rate) than in tax advantageous accounts. Since municipal bonds don't pay federal taxes and may not be subject to state taxes, harboring these in your ROTH account would not be prudent.

The longer your horizon, the more volatility you can withstand. Equities have vastly outperformed bonds and other investments when measured in decades. Therefore, someone in their 30's, given their time horizon, should have a majority of their funds in equities (at least 70/80%). In addition, feel free to add a portion in bitcoin as it's hard to see bitcoin not substantially higher in a decade. However, due to the lack of long-term data and possible externalities (US government) among other risks not seen as much in equities, I view bitcoin as more speculative & have limited it to no more than 5-10% of my portfolio. The final point, and probably the most important, is to not only have an investment plan/strategy, but also to develop of thorough understanding of your investment. I'm not as in tune in the expansive crypto market and therefore, I do not invest. However, it seems as though our thread friends have a vast understanding & therefore, they may feel comfortable accepting the risk due to their expansive knowledge of cryptos.

Hope this helps a bit and provides a brief baseline for you to build upon. Let me know if you have any other questions!

If you’re saving 39% of your pay I’d bump up your 401K contribution to try maximize the 2021 tax free contribution of $19.5K. I’m assuming 6% is your employee match, but I’d put more.

Instead of bumping up 401k, I’d max out accounts such as ROTHs and HSAs first. Everyone should be maxing ROTHs if possible, imo.

Is the 39% pre or post tax?

Has an IRS agent actually taken a steak off of someone's table?


MLYLT do the vacationing thing when things open up. It's more fun now then old.

Hi Kibz I have a question. I participate in an employee discounted stock purchase plan (DSPP). I hung onto a tad too much and it dropped significantly last year. I’m still buying stock twice a year but almost as soon as I purchase it I’m selling older stock at a sell price less than purchase.

Normally one doesn’t pay taxes when selling at a lost but I suppose it looks weird when you sell old stock but are buying a similar value of the same stock at nearly the same time?

Is the IRS going to bust me for something?

Or crap first pay off the nearly $100K in student debt with a good amount towards the private loans.

MLYLT aren’t you an ME and in your 30’s? I’d imagine other than some unemployed stretches you’ve been working over 10 years and making over $100K a year? How do you still have so much student debt? Also **** where did you go to school, some fancy private school which offered almost no personal student grants? I’d imagine the most expensive engineering schools back in the early to mid 2000’s you’re at most leaving school with $100K in debt.

Not criticizing just trying to understand how this happens.

Paying off debt first is probably the best option. Or at least try to consolidate to a lower overall rate if you can.

Yeah, I was thinking of paying off all the private student loans with the profits from my home sell.

The 39% is post tax.

I was really really dumb and went to a private school that didn't offer engineering to play volleyball/softball with my friends, got a bullshit degree, went to another private school for a couple of years, then went to a state school where none of the classes transfered to engineering. Was in school from 2003-2010 with all that interest piling up that would then be added to my principal balance. I'm paying interest on top of interest. I had no clue about interest or loans when I took these out.

I do not and have never made more than $100k/yr. I believe that I have been underpaid for years.....you know, being a woman in engineering . My income has only increased 16% over the past 10yrs.
My current company originally offered me $56k and I told em hell no and had another company offer me $64k which I declined.
When I was interviewing with Lockheed Martin the pay was $70k for those positions.

Code3 has been working professionally half the time as me, is in finance, and makes about the same salary. Don't have a vagina and go into engineering if you want to make money.

I am confused as to how this seems to be such a big deal in the US - do they not just have the same income tax system as over here where they just take it out from wages at source, then automatically refund if needed?

Oh wow ok I can see how you ended up with so much student debt.

I guess I’m naive but figured most engineers these days out of college are making over $80K a year and someone with your experience would be making $120K+. https://www.indeed.com/career/mechan...er/salaries/TX


I don’t know about the being a women being the problem. Yes it’s a male dominated industry and can be very sexist. But because of this most large companies will go out of there way to recruit female engineers and are highly incentivized to promote women and will pay a premium for female candidates as there so rare.

Hi -

No - you have nothing to worry about. Unless your breaking by evading taxes, which would be hard to conclude given your explanation and resulting loss.

Cool question. I've worked with these a few times in practice but more so in a tax reporting hat. Quite the unique employee benefits!

From the surface, its seems like a risk-free discount gain at time of purchase that may be subject to STCG* tax at year end (dependent on year-end capital game netting) is superior to holding long-term for either indefinitely or at least 1 year). Diversification risk - see Enron employees - of owning a large amount of your employers stock, in addition to the inherent risk of holding equities in general, make any possible tax-efficient treatment seem like the definition of avoidable risk.


One tax strategy I'd look into if you're going to have 2 constant STCG gains during the year, is to implement yearly tax harvesting strategy. Tax harvesting is the process of purposely triggering a capital loss on a stock/ETF, etc. & then repurchasing a highly correlative stock as a replacement (cannot be identical). This process of tax loss harvesting can be used to offset the STCG from the ESPP. Be sure you understand wash sales rules if you wish to implement this strategy.

*For those who aren't aware: a net short-term capital gain at year-end is taxed at your ordinary tax rates - while long-term capital gains are, pending Biden's proposed tax 39.6% capital gains tax for those with $1M income for year, LTCG are taxed at a max rate of 20% (If AGI <=$40,000 - Tax rate is 0% | If AGI $40,001 - $441,451 - Tax rate is 15% | Amount above taxed at 20%)

Interested to hear if you've gained any other possible insight regarding ESPPs since you've participated!

If you can save 39% post tax, throw as much as you can at the high interest debt. Put another way, you’d happily invest and secure a guaranteed 5.5-10% annual gains. So pay off the debt and save, while being able to deduct some of the interest from AGI.

I think the interest rates are too high to opt for saving instead other than securing the 401k match. I guess there is also a chance the current admin forgives some of it, but I don’t think they’d forgive a balance that high, so not something I’d consider in the short term.

I bet JL15 would have some good takes on this. He of the credit building thread.

Take what out of income at source? Student loan repayment or tax withholding?

I have not found that to be the case at all for Mechanical. Civil and Architectural firms will because they have to employee so many women, they fill this quota in mostly hr/marketing positions. I applied for 2k+ jobs with an interview rate of ~0.6%.
My location is also a factor: conservative, backwoods thinking, men afraid to work with women in the same position, and a low rate of professional women in general.

A guy I worked with before, who only had 2yrs more experience than me and we were doing the exact same job, made $30k more than me.
I actually left that job because I was pissed about it, so if anyone knows any equal rights stuff where I could go back and sue them for wages I'm all ears. At this point IDGAF and would pursue it whereas back then I was worried about being black listed and never finding a job again if I ruffled feathers.

Here, it's both

Kibz,

Thanks for your response earlier.

Is investing in REITs a good option in this current housing market with rents reducing, the number of people not paying rent now, and the mass evictions that will happen over the summer.

You have way too much debt to clean up and too little (if any, given the debt) to invest even to consider doing anything with REITs.

I am not a financial professional, but you don't need one to look at what you listed and give you decent advice. Get back to basics.

I disagree. It sounds like the stereotypical situation of a shitcoin investor!

The crypto is calling!