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#1: Coming upon age 30, how's my plan going?

Posted on 2006-03-07 21:49:55 by Bobby_M

Some of you have seen my thread on helping my parents get back on track
for retirement and it got me thinking more about my own situation. I'd
like to lay out where I am now to see if some of you fine people might
be able to nudge me in a better direction if appropriate.

Age 29, wife 31.

I earn about 70k per year, reletively secure job that I've had for 10
years and I'm overdue for promotion.
401k plan balance is $100,000ish in mostly Vanguard Explorer and
Primecap. Some in previous employer's stock (IPOing soon). I've been
contributing 8% for 10 years though my company only matches 4%.

We rolled over my wife's 401k, when she quit to raise our daughter,
into 5 different diversified Fidelity funds (total of about 28k,
growing nicely since).

The house I'm in now is worth about $475,000 and I owe $240k on it (2
years into 5.875% 30year fixed). I've been paying $500 additional
principal per month since we bought the place.

I have 102k in a money market account paying 4.7% APY. I have this
money sitting here because it is the highest yielding liquid account I
could find. I'm thinking about buying an investment property (for
rental or resale) so I figured I'd need some cash.

$15k in my employer's previous owner's company stock which will IPO
soon (non 401k/IRA)
$15k in Fidelity contrafund (FCNTX) (non IRA)
$10k in I bonds (non IRA).
$10k in various energy and tech company stocks.
$4k in Wells Fargo WZFTX (tech sector fund)
$8k in savings/checking for bills, etc.

No credit card debt, school or auto loans. The mortgage is my only real
liability.

I feel like I'm doing OK, especially for my age, but I feel like I
could probably be making better choices with my money (I just don't
know what). I'm always wrestling with whether I should significantly
pay down the mortgage because I have a real aversion to debt. However,
I can't help but think I can leverage the cash for a few sequential
real estate investments. I don't have any specific questions other than
asking what YOU would do if you were me and does it look like I'll have
enough to retire on?

Bobby

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#2: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-07 23:37:08 by Ian Pilcher

Bobby_M wrote:
> I feel like I'm doing OK, especially for my age, but I feel like I
> could probably be making better choices with my money (I just don't
> know what). I'm always wrestling with whether I should significantly
> pay down the mortgage because I have a real aversion to debt. However,
> I can't help but think I can leverage the cash for a few sequential
> real estate investments. I don't have any specific questions other than
> asking what YOU would do if you were me and does it look like I'll have
> enough to retire on?

I'd say that you're doing very well, indeed. There's no such thing as a
perfect financial plan or portfolio, particularly over a period as long
as 20-30 years.

Relax, keep saving, don't do anything stupid, and do what's right for
you and your wife. (*I* would be a bit cautious about the real estate
investing. Despite what some people say, it's not an automatic license
to print money.)

--
============================================================ ============
Ian Pilcher <a href="mailto:i.pilcher&#64;comcast.net" target="_blank">i.pilcher&#64;comcast.net</a>
============================================================ ============

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#3: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-08 00:28:18 by Elle

What's a year of living expenses ( = emergency fund) for
your family? I'd supplement the $8k to achieve this
emergency fund amount, then I'd pay down the house with the
rest of the $100k in the money market. That's a guaranteed
5.875% return vs. a leverage plan with risk really unknown.
I wouldn't roll the dice much with a mortgage this large,
given you have a family to support and a daughter to send to
college.

Have you investigated tax advantaged savings plans for your
child's college education? Google for {529 coverdell}, for
starters.

Stop contributing the extra 4% to the company 401(k) and
open a Roth IRA. That's about $2800 a year, way less than
you're allowed to contribute to a Roth. Ask if you don't
understand why I suggest this.

You're throwing away (on taxes) money in these taxable
accounts. Balance opening and contributing even more to a
Roth against paying down the house further.

Do you have an allocation plan? Try those linked at
<a href="http://home.earthlink.net/~elle_navorski/id4.html" target="_blank">http://home.earthlink.net/~elle_navorski/id4.html</a> to get an
idea of strategies. Your diversification does not look bad
at first blush.

Do you have enough for retirement, taking into account all
that's mentioned above? Some crude calculations using the
retirement calculators at
<a href="http://www.fincalc.com/" target="_blank">http://www.fincalc.com/</a> indicate you're in good shape, but
you really should experiment with your own numbers to get a
good grasp of what's necessary in the coming years.

For all your mutual funds: See if there are index funds with
lower expense ratios that do what your current funds do.
Absolutely never buy into a fund with a load. If you're
tempted, ask about the specific fund here or at
misc.invest.mutual-funds.

Try not to hold more than about 5% of your retirement
portfolio in one asset category. So for example watch that
$15k company stock you hold. Might want to sell that,
watching out for tax consequences.

You asked about probate in another thread. My eyebrows went
up (in amazement that you'd done nothing with the probate
courts following your grandmother's decease), but I have
only a bit of experience in this area. So I could be
mistaken. Google for {&quot;purpose of probate&quot;} for an
introduction. Lawyers are loathsome to hire, but sometimes
they are essential. I know you say you trust everyone in the
family, but for one thing, I am not sure you are complying
with the law. (As was mentioned elsewhere, a good personal
accounant may be able to give you a ton of advice here,
too.) For another, ya never know when some family member may
want a bigger piece of the pie.

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#4: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-08 03:50:53 by dapperdobbs

Bobby -

Without going into details that can and will change:
1) get a post-nup, or a divorce will wipe you out (sorry, but it
happens)
2) historically, the stock market returns are the highest of any asset
class - learn about selecting your own stocks; I always recommend Ben
Graham
3) in your tax bracket, your mortgage interest is deductible; compare
the after tax cost of the mortgage to the historic 12% return on
stocks, and it may not be such a good idea to sink your money into
paying off the mortgage debt
4) you mentioned real estate as an investment, right after you mention
your aversion to debt - as far as I know, those are contradictions in
terms, since the big advantage to real estate is the huge amount of
leverage. Make darn sure you study hard and fully understand before you
invest your money. I know very little about real estate, but even I can
see the contradiction just mentioned.
5) study hard means finding good books to read.

Other than the above, don't lose sight of where your happiness comes
from, and make that your #1 focus, then focus on your #2, and then,
well, money is nice, but probably #3 or #4 or #5. (It's only if you
don't have some money that it becomes #1.)

Report this message

#5: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-08 03:51:15 by dapperdobbs

Bobby -

Without going into details that can and will change:
1) get a post-nup, or a divorce will wipe you out (sorry, but it
happens)
2) historically, the stock market returns are the highest of any asset
class - learn about selecting your own stocks; I always recommend Ben
Graham
3) in your tax bracket, your mortgage interest is deductible; compare
the after tax cost of the mortgage to the historic 12% return on
stocks, and it may not be such a good idea to sink your money into
paying off the mortgage debt
4) you mentioned real estate as an investment, right after you mention
your aversion to debt - as far as I know, those are contradictions in
terms, since the big advantage to real estate is the huge amount of
leverage. Make darn sure you study hard and fully understand before you
invest your money. I know very little about real estate, but even I can
see the contradiction just mentioned.
5) study hard means finding good books to read.

Other than the above, don't lose sight of where your happiness comes
from, and make that your #1 focus, then focus on your #2, and then,
well, money is nice, but probably #3 or #4 or #5. (It's only if you
don't have some money that it becomes #1.)

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#6: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-08 07:03:13 by Ron Peterson

Bobby_M wrote:

&gt; I have 102k in a money market account paying 4.7% APY. I have this
&gt; money sitting here because it is the highest yielding liquid account I
&gt; could find. I'm thinking about buying an investment property (for
&gt; rental or resale) so I figured I'd need some cash.

You probably could reduce the amount in the money market. You could put
some in the stock market which is liquid but not low risk. Or, even pay
off more on your house.

--
Ron

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#7: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-08 11:00:58 by Rohan

you're in great shape, bobby.

however, you might want to consider opening a Roth IRA as mentioned. your
tax savings will be incredibly higher if you do that now, assuming you will
move up the income ladder and you will no longer qualify to contribute.

the leftover invested money should be invested until you max out the
401k(s), provided that you have a professional look at your investment
choices in the 401k. chances are that you have good enough options that
will outweigh the better funds but extra tax you deal with in a standard
brokerage account.

i would get out of the individual stock holdings and put that money into
some of your existing funds. the tech fund is okay for this year, but i
would keep a close eye on that.

if you are going to have kids, you may want to consider saving up some money
for life insurance (TERM ONLY). don't buy any of that universal life,
variable life junk.

-r

&quot;Bobby_M&quot; &lt;<a href="mailto:rmierzej&#64;telcordia.com" target="_blank">rmierzej&#64;telcordia.com</a>&gt; wrote in message
news:<a href="mailto:1141762403.001497.196950&#64;j52g2000cwj.googlegroups.com..." target="_blank">1141762403.001497.196950&#64;j52g2000cwj.googlegroups.com...</a>
&gt; Some of you have seen my thread on helping my parents get back on track
&gt; for retirement and it got me thinking more about my own situation. I'd
&gt; like to lay out where I am now to see if some of you fine people might
&gt; be able to nudge me in a better direction if appropriate.
&gt;
&gt; Age 29, wife 31.
&gt;
&gt; I earn about 70k per year, reletively secure job that I've had for 10
&gt; years and I'm overdue for promotion.
&gt; 401k plan balance is $100,000ish in mostly Vanguard Explorer and
&gt; Primecap. Some in previous employer's stock (IPOing soon). I've been
&gt; contributing 8% for 10 years though my company only matches 4%.
&gt;
&gt; We rolled over my wife's 401k, when she quit to raise our daughter,
&gt; into 5 different diversified Fidelity funds (total of about 28k,
&gt; growing nicely since).
&gt;
&gt; The house I'm in now is worth about $475,000 and I owe $240k on it (2
&gt; years into 5.875% 30year fixed). I've been paying $500 additional
&gt; principal per month since we bought the place.
&gt;
&gt; I have 102k in a money market account paying 4.7% APY. I have this
&gt; money sitting here because it is the highest yielding liquid account I
&gt; could find. I'm thinking about buying an investment property (for
&gt; rental or resale) so I figured I'd need some cash.
&gt;
&gt; $15k in my employer's previous owner's company stock which will IPO
&gt; soon (non 401k/IRA)
&gt; $15k in Fidelity contrafund (FCNTX) (non IRA)
&gt; $10k in I bonds (non IRA).
&gt; $10k in various energy and tech company stocks.
&gt; $4k in Wells Fargo WZFTX (tech sector fund)
&gt; $8k in savings/checking for bills, etc.
&gt;
&gt; No credit card debt, school or auto loans. The mortgage is my only real
&gt; liability.
&gt;
&gt; I feel like I'm doing OK, especially for my age, but I feel like I
&gt; could probably be making better choices with my money (I just don't
&gt; know what). I'm always wrestling with whether I should significantly
&gt; pay down the mortgage because I have a real aversion to debt. However,
&gt; I can't help but think I can leverage the cash for a few sequential
&gt; real estate investments. I don't have any specific questions other than
&gt; asking what YOU would do if you were me and does it look like I'll have
&gt; enough to retire on?
&gt;
&gt; Bobby
&gt;


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. &quot;Trim&quot; means that except for a few lines to add context, the previous post is deleted.

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#8: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-08 17:32:20 by Bobby_M

I really appreciate all the input but I do have a few more questions.

I'm still having trouble understanding the benefits of a Roth over
regular 401k. Overall, I'm happy with the investment choices in the
401k (Vanguard). I'd prefer Fidelity though (maybe that's enough reason
to go with a Roth). Is it the fact that there are no forced
distributions later? Don't non-IRA I bonds have a similar incentive in
that they don't incur taxable interest until cashed out? For example,
say I purchased ten $5k Ibonds today. I will retire before the 30 year
interest bearing period is over. I can then cash in individual bonds as
needed, hopefully while i'm in a lower bracket. The only difference
between this and an IRA that I can see if the ability to transfer into
a different investment type without taking a tax hit. Am I nuts?

Stock holdings. I only recently began buying and selling stock on my
own and am really using it as a learning experience with a reletively
small percentage of my disposable income. In 2005, I was up $750 (about
10%) in realized gains and down $220 in unrealized. I do like the
homework involved, but I can also appreciate the auto-pilot of a good
fund as long as the fees are less than 1% and it has reasonable
dividends.

Life insurance. I'm covered for $130k through my employer and I thought
that was enough until I had my first child recently. I can suppliment
the coverage though the same plan and will likely do that. How much
more?

Money market: The only reason I have 101k in there now is because they
recently created a large incentive to +100k. The 10k-99k rate is
4.25apy while +100k is 4.7%. I was pretty close to begin with and
thought it would be a reasonable short term move to get it up to that
rate.

I'm having a hard time figuring out the cost of my mortgage for a few
reasons. First, I obviously need to figure out my effective tax rate to
figure the post-tax cost of the mortgage. However, I try to use my
turbo-tax software to come to that conclusion but it is already
figuring in the mortgage interest deduction. Maybe I can create a dummy
return with the mortgage deduction removed and compare the two &quot;tax
owed&quot; figures to find my annual cost. The other difficulty is the fact
that i'm paying down $500/month principal which effectively reduces my
interest hit right?


Bobby

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#9: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-08 18:07:23 by Elle

Bobby,

The guideline for saving for retirement via IRAs and 401(k)s
is as follows:

1.
Contribute to the 401(k) up to the employer's match. This
results in an immediate 100% return on one's money.

2.
Contribute to a Roth IRA to get the tax advantage on the
earnings of those contributions. At retirement, one pays no
taxes on distributions from the Roth IRA. Also the Roth IRA
is more flexible: One may withdraw the contribution (but not
earnings) portion of what's in it at any time. Also, one may
buy into the mutual fund, stocks, bonds, whatever of one's
choice within a Roth IRA. 401(k)s tend to have restrictions
on the investment vehicles.

3.
Resume contributing to the 401(k) to achieve the tax
advantage.

This will vary somewhat according to things like what one's
anticipated retirement tax rate will be. Also, in place of
3. some people might like to pay down one's home mortgage
instead. (Or some may prefer to leverage, as you have
suggested and dapperdobbs has reinforced.)

I am not well-acquainted with the forced distributions of
IRAs or 401(k)s, but the above should denote the principal
concerns a young person should have.

You are thinking rationally when you point out that certain
federal government bonds do not require payment over the
years on accumulating interest.

As for Vanguard vs. Fidelity vs. someone else, I'd start
another thread, identifying what services you want from your
mutual fund company/brokerage. I will say that Vanguard has
way more index funds than Fidelity, and that's a huge
advantage of it. OTOH, my understanding is that Vanguard
can't touch Fidelity for brokerage fees and services... just
a few ideas to investigate.

Re stock picking: I think it's great that you're
experimenting but, as you emphasized, with only a small
amount of money. For further study, let me urge, with the
poster dapperdobbs, googling for the ideas of the original
Value Investing guru Benjamin Graham, then perhaps at least
skimming his book _The Intelligent Investor_, especially the
chapters which quickly introduce a mechanical approach to
picking stocks without risking one's life savings (IMO).
This book is many decades old and is now a classic. The
approach of course may be refined according to one's taste.
The posts of one Tad Borek here also tend to touch upon this
style of stock picking. The one drawback to this approach
may seem to be that pickings are currently slim. But that's
what people mean when they observe the market to be somewhat
overvalued right now. Cash is a good place to have a lot of
one's money right now, particularly with, like you pointed
out, the fabulous money market rates at the moment. I'm
still mostly in stocks, but I have more in cash than I've
ever had. I'm just waiting for a market correction, prepared
to pounce if and when it does happen.

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#10: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-08 19:09:30 by bo peep

&lt;&lt;I'm still having trouble understanding the benefits of a Roth over
regular 401k&gt;&gt;

The higher your tax bracket, the bigger the benefit - the difference is
that you pay no tax *ever* on the growth that happens inside the Roth:

401k scenario, assuming 20% tax bracket
Put $5k of before-tax money in 401k - get back $1k extra on income tax
refund
After 30 years, $5k in 401k has grown to say $15K
After 30 years, $1k refund has grown to say $3K outside 401k
Distribute $15k, pay $3k in tax
Net = $15k - $3k tax - $5k investment + $3k refund - $600 tax on refund
= $9,400 profit

Roth scenario, any tax bracket
Put $5k of after-tax money in 401k - get back nothing extra on income
tax refund
After 30 years, $5k has grown to say $15K
Distribute $15k, pay nothing in tax
Net = $15k - no tax - $5k investment + no refund = $10k profit

John Cowart

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#11: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-08 20:26:13 by Bobby_M

John,
Very much appreciated, I see the benefit.

Bobby

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#12: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-08 22:05:28 by Andy

Bobby_M wrote:

&gt; I feel like I'm doing OK, especially for my age, but I feel like I
&gt; could probably be making better choices with my money (I just don't
&gt; know what). I'm always wrestling with whether I should significantly
&gt; pay down the mortgage because I have a real aversion to debt. However,
&gt; I can't help but think I can leverage the cash for a few sequential
&gt; real estate investments. I don't have any specific questions other than
&gt; asking what YOU would do if you were me and does it look like I'll have
&gt; enough to retire on?

I am very impressed. Your net worth is probably in the top 5% for
households in your age and income bracket, if not the top 2%. And to
answer your question, I personally would probably do exactly what you
are doing now.

A few studies have been done showing that the single most important
factor in financial planning is what percentage of your income you save
each year. Your annual savings percentage has a substantially bigger
impact on your retirement savings than diversification, what kinds of
mutual funds you choose, etc. It looks to me like you have been doing
a good job on saving a lot, and I think you can take your time about
figuring out how to diversify, whether or not to pay down the mortgage,
whether or not to invest in real estate, etc. I think a lot of
financial mistakes are made because a false sense of urgency leads
people make choices they don't really understand fully. So kick back,
keep learning, and only make moves when the reasoning behind the move
is crystal clear in your mind and you understand all the ramifications.

My only thing to share an old joke. Two guys in the woods run into an
angry grizzly bear, and one of them starts running away. The other guy
yells &quot;Why are running; You know you can't outrun a grizzly.&quot; The
running guy responds &quot;I don't have to outrun the grizzly, I just have
to outrun you!&quot; I think this joke illustrates an important principle
about saving for retirement. By the time you retire the prices of the
various goods and services consumed by retirees will be heavily
influenced by how much money people have saved for retirement (i.e.
prices will be such that the median retiree can afford the important
stuff). Plus, society is not going to let 95% of old folks end up
homeless beggars with no health care. Plus, people's sense of how well
they are doing is heavily influenced by how their situation compares to
that of their peers. So, put all those factors together and I conclude
that as long as you keep your net worth is the top 5-10% for your age
group and income bracket you can be pretty confident that you will feel
satisfied with your nest egg when you reach retirement. You don't have
to save some magic figure; you just have to save more than your peers.

Thanks,

Andy

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#13: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-08 22:45:59 by Don Zimmerman

&quot;Bobby_M&quot; &lt;<a href="mailto:rmierzej&#64;telcordia.com" target="_blank">rmierzej&#64;telcordia.com</a>&gt; wrote in message
news:<a href="mailto:1141762403.001497.196950&#64;j52g2000cwj.googlegroups.com..." target="_blank">1141762403.001497.196950&#64;j52g2000cwj.googlegroups.com...</a>

&gt; I feel like I'm doing OK, especially for my age, but I feel like I
&gt; could probably be making better choices with my money (I just don't
&gt; know what). I'm always wrestling with whether I should significantly
&gt; pay down the mortgage because I have a real aversion to debt. However,
&gt; I can't help but think I can leverage the cash for a few sequential
&gt; real estate investments. I don't have any specific questions other than
&gt; asking what YOU would do if you were me and does it look like I'll have
&gt; enough to retire on?

A lot of people here focus on stocks and mutual funds, as you can see, but I
think some real estate investment in addition to your other holdings is a
good idea, provided you do it long term and don't expect a big profit
overnight. Also take a look at dividend reinvestment plans (DRIPs) if you
haven't already done so.

Report this message

#14: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-09 15:32:19 by noreplysoccer

I agree the current house looks in order.

I see some contradictions in your post and the replies:

1) Real Estate vs debt aversion. If you invest in real estate, is this
a rental property or vacation home?

2) use $102,000 to pay down mortgage, but stop paying extra $500/month
on mortgage

and one question I have-

how dependant are you on itemizing your mortgage interest when filing
income taxes?

and the many comments I have:

If you are expecting to make more money in the future, investing in a
Roth makes sense. Because the money you withdraw might be when tax
rates in general are higher, and your personal tax rate is higher.

I'd not recomend cashing out of any existing investment unless there is
a reason you need the money. Cashing out would trigger taxes, and
possibly deny your Roth eligibility for that year if the gain was high
enough.

Continue paying the extra $500 to the mortgage each month. This
appears to make you happy and more comfortable, and I think this is
quite important to you.

Life insurance- I would comment you need enough life insurance to get
your kid to age 18. This means either enough to replace your income
for 17 years, or enough to cover daycare costs until your child is old
enough for school (assuming you wife can make enough to support the two
of them). The way my wife and I decided how much was to have term
policies to cover all our debt (like mortgage and student loans), so
the other does not have to worry about payments, only living expenses.
We then bought seperate permanent policies to cover funeral expenses.
The term policies cover debt which will go away, the permanent policies
cover something that will happen sooner or later. Permanent policies
are for a much lkower amount of insurance as well (term is 300k,
permanent is 20k or 25k, I think).

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#15: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-09 15:58:23 by dapperdobbs

Bobby - Yes, set up a dummy return in Turbo Tax. And read Ben Graham as
Elle suggests. Your 10% return can turn into an average annualized
return extending over many years - that is well within the historical
norm. With growing expertise and knowledge, you might average 16%. N.
An indivdual has significant advantages over funds. In all things, if
you work with a blindfold on, things are going to be more difficult. Do
not learn from your mistakes when you can learn from others. Read! When
it comes to financial planning, stocks, mortgages, taxes, budgets, and
so on, numbers 'remove the blindfold'. The numbers are something you
can get precise with, even with different scenarios. Get a good book on
accounting and learn it over the years. (What you said about difficulty
figuring out your mortgage tax effect indicates that you are not
nailing down your numbers sufficiently. Though not an accountant, I use
Turbo Tax to set up parameters that I lay out in a spreadsheet - e.g. a
recent one was pretty simple and had five different scenarios (five
spreadsheet columns comparing income, taxes due, and effective rates).
For yourself, I would suggest 5 to 10k increments, and what you want to
end up with is an understanding of the 'trend' of tax effects. Then do
some speculation about income, cap gains versus taxable interest, and
so on. I'm sure you'll get the hang of it and develop your accounting
well beyond these rudiments.)

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#16: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-09 21:39:54 by Bobby_M

It just goes to show how individual such planning really has to be...

&gt;&gt;&gt;Life insurance- I would comment you need enough life insurance to get
your kid to age 18.

I do agree with this with a small caveat. Both my wife and I have
excellent family support. If I died today, even with my marginal
insurance coverage ($140k), she and my daughter would not be left high
and dry. Her sister is wealthy and would definitely help out. The same
goes for many people in my own family if it were to go the other way
(aunts who would look after my daughter while I continue to earn
money). If we were completely isolated from this support, I would raise
my policy immediately.


I'm not sure I'm being that contradictory with real estate vs. debt
aversion. In concept, I feel safer with less debt but that does not
mean I wouldn't push the limits of such comfort to make more money in
real estate. What I meant by investing in real estate is either
buy-fixup-sell or rental property.

The only reason i'm paying +$500/m principal is I felt it was the next
best thing to paying down in one lump sum prior to making alternate
moves with that $100k.

Can someone help me understand why one would typically be in a higher
tax bracket during retirement than say now? For some reason, I can't
imagine that happening unless the actual rates get hyperinflated in the
coming years. Don't people typically take in only 60-80% of their
pre-retirement income (if they're lucky) once they retire?

Bobby

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#17: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-09 21:40:02 by Bobby_M

Agreed. I have been doing some reading, quite a lot actually. I've also
begun to realize additional tools within turbotax once you've used it
year after year. I suppose one of my difficulties is that over the past
3-5 years, each year has some reletively significant event that changes
my overall tax structure (marriage, wife quitting job to have baby,
daughter being born (new dependent). I still agree that trends can be
identified, at least in average, and used in making better decisions.
Thanks.

Bobby

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#18: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-09 22:06:00 by noreplysoccer

future tax rates-

Bush gave us a tax cut a few years back. I am guessing my tax rate
will increase because a) the Bush tax cuts get repealed and b) I will
make more money in the future. US is a graduated income tax, the more
money you make, the higher percentage of taxes one owes. I am also
confident I will have close to $3 million when I retire. Our AGI is
slightly more than your now- we each put 10%+ into 401k, plus match,
plus I max out my Roth IRA. Quite confident I'll have more money in 40
years than I do now.

Kudos to the family for being able to help you in liu of life
insurance. I choose to not rely on my family because they cannot be
trusted. My in laws are great, but do not have the resource to watch a
kid during the day. I personally choose to take care of myself and not
be a burden on anyone else, but others are free to make their own
choices.

If you are looking to make more money in real estate, I would research
this. Make sure you understand the basic premise of &quot;borrow&quot; to get
the rental (leverage), and use the rental income to pay this property
off. Consider using the 102k you have saved as collateral for this
plan, but try to not put all 102k into a rental or fixer upper. Too
much risk, I think, IMO. Look for a place which costs around 100k and
put down 20%, using the other $82,000 for another opportunity or to
pay costs incurred to manage property.

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#19: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-09 22:07:30 by noreplysoccer

second point on rental- make sure you can earn more than the 4% the
102k is making now. the 102k is &quot;low risk&quot; for return, the rental
property is much higher risk, you'll have more on the line to lose, so
look to make 10-20% on this thru rental fees.

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#20: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-09 23:13:35 by Douglas Johnson

&quot;Bobby_M&quot; &lt;<a href="mailto:rmierzej&#64;telcordia.com" target="_blank">rmierzej&#64;telcordia.com</a>&gt; wrote:


&gt;I'm not sure I'm being that contradictory with real estate vs. debt
&gt;aversion. In concept, I feel safer with less debt but that does not
&gt;mean I wouldn't push the limits of such comfort to make more money in
&gt;real estate. What I meant by investing in real estate is either
&gt;buy-fixup-sell or rental property.

This is more a business than an investment. By that, I mean you must be willing
to devote a pretty fair amount of time to either rental property or fixup. You
might look at REIT's for more passive real estate. Finally, consider that most
people have a large percentage of their net worth in real estate anyway with
their personal residence.

&gt;Can someone help me understand why one would typically be in a higher
&gt;tax bracket during retirement than say now?

Sure. Most retirees have far fewer deductions -- no mortgage or kids. There is
a band where your social security is taxable. That can bump your marginal rate.
Also an aggressive saver may have more income in retirement than in their early
earning years.

-- Doug

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#21: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-09 23:30:22 by bo peep

&lt;&lt;Can someone help me understand why one would typically be in a higher
tax bracket during retirement than say now?&gt;&gt;

1. No young children to take as deductions
2. Mortgage already paid off, so no deduction for the interest
3. No Earned Income Credit because children are grown up
4. No Child Care credit
5. Medical expenses can trigger large withdrawls from tax deferred
accounts
6. Possibly drawing taxable Social Security while still working

John Cowart

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#22: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-10 17:00:33 by Will Trice

bo peep wrote:
&gt; &lt;&lt;I'm still having trouble understanding the benefits of a Roth over
&gt; regular 401k&gt;&gt;
&gt;
&gt; The higher your tax bracket, the bigger the benefit - the difference
&gt; is that you pay no tax *ever* on the growth that happens inside the
&gt; Roth:
&gt;
&gt; 401k scenario, assuming 20% tax bracket Put $5k of before-tax money
&gt; in 401k - get back $1k extra on income tax refund After 30 years, $5k
&gt; in 401k has grown to say $15K After 30 years, $1k refund has grown to
&gt; say $3K outside 401k Distribute $15k, pay $3k in tax Net = $15k - $3k
&gt; tax - $5k investment + $3k refund - $600 tax on refund = $9,400
&gt; profit
&gt;
&gt; Roth scenario, any tax bracket Put $5k of after-tax money in 401k -
&gt; get back nothing extra on income tax refund After 30 years, $5k has
&gt; grown to say $15K Distribute $15k, pay nothing in tax Net = $15k - no
&gt; tax - $5k investment + no refund = $10k profit

Bobby could of course invest an additional $1000 in the 401(k) (for a
total of $6000, using the refund of $1000 to pay for the daily sundries
that the $1000 would have paid for had it not been put in the 401(k).
Then both scenarios would be identical. This is the typical way to look
at this situation.

-Will

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#23: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-10 17:09:32 by Will Trice

Elle wrote:
&gt; For further study, let me urge, with the
&gt; poster dapperdobbs, googling for the ideas of the original
&gt; Value Investing guru Benjamin Graham, then perhaps at least
&gt; skimming his book _The Intelligent Investor_, especially the
&gt; chapters which quickly introduce a mechanical approach to
&gt; picking stocks without risking one's life savings (IMO).

Not sure what exactly you're referring to, but Graham does not give what
most people would call a &quot;mechanical&quot; approach, IMO. In fact, one must
remember &quot;Graham's Law&quot;: 'All mechanical formulas for earning higher
stock performance are &quot;a kind of self-destructive process-akin to the
law of diminishing returns.&quot;' (pg. 46 of the 2003 edition of _The
Intelligent Investor_).

-Will

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#24: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-10 17:22:24 by Bobby_M

Ok, So I've played around with turbotax a bit. Basically, my 2005
return ended up with an effective tax rate of 8%. I then copied that
file and deleted my mortgage interest deduction of ($14,000) which made
my effective tax rate 11.5%. I don't remember the numbers exactly but
tax owed went from $850 to about $4600.

I read somewhere that finding the after tax cost is interest rate x
(1-effective tax rate). So for me that would be .05875 x (1-.08)= 5.4%.
If I then compare that to my after tax gains in a money market account,
.047 x .92 = 4.3%

If that is accurate, it seems that 5.4 - 4.3 = 1.1% gap in favor of
paying the mortgage down at least at this point right? Of course it
assumes that 4.7APY is the best I'm going to able to do which may or
may not be the case.

I have been itemizing but the mortgage interest has been a major part
of it. If I didn't have the mortgage interest, I'd likely take the
standard deduction. Property tax is $7700.

Bobby

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#25: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-10 17:40:34 by Elle

&quot;Will Trice&quot; &lt;<a href="mailto:wwtrice&#64;paragondynamics.com" target="_blank">wwtrice&#64;paragondynamics.com</a>&gt; wrote
&gt; Elle wrote:
&gt;&gt; For further study, let me urge, with the
&gt;&gt; poster dapperdobbs, googling for the ideas of the
&gt;&gt; original Value Investing guru Benjamin Graham, then
&gt;&gt; perhaps at least skimming his book _The Intelligent
&gt;&gt; Investor_, especially the chapters which quickly
&gt;&gt; introduce a mechanical approach to picking stocks without
&gt;&gt; risking one's life savings (IMO).
&gt;
&gt; Not sure what exactly you're referring to, but Graham does
&gt; not give what most people would call a &quot;mechanical&quot;
&gt; approach, IMO.

Given the context of my remarks, I think our difference is
semantical. Chapters of TII do indeed advocate (though not
necessarily exclusively) hard, black-and-white numerical
criteria to use to pick stocks. For example, the seven tests
Graham proposes in Chapter 14 for a &quot;defensive investor&quot; are
listed at
<a href="http://beginnersinvest.about.com/cs/valueinvesting1/a/101302a.htm" target="_blank"> http://beginnersinvest.about.com/cs/valueinvesting1/a/101302 a.htm</a> .
One can devise a very simply screener and apply these tests.
To me, that's &quot;mechanical.&quot;

By contrast, there is at least one section of TII which
pillories (and rightly so, AFAIC) so-called &quot;technical&quot;
analysis.

Is this the distinction you're trying to bring out?

Graham's approach (and the Value Investing philosophy in
general) attempts to quantify to some extent the intrinsic
value of a company (including parameters such as assets and
liabilities). &quot;Technical&quot; analysis disregards intrinsic
value.

Blah blah. I didn't want to lecture. I feel my statements
are true to the source cited.

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#26: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-10 19:16:10 by Ian Pilcher

Bobby_M wrote:
&gt; I have been itemizing but the mortgage interest has been a major part
&gt; of it. If I didn't have the mortgage interest, I'd likely take the
&gt; standard deduction. Property tax is $7700.

When is your property tax due? If it's shortly after the end of the
year, you could alternate years in which you pay in January and December
and itemize with years in which you take the standard deduction.

--
============================================================ ============
Ian Pilcher <a href="mailto:i.pilcher&#64;comcast.net" target="_blank">i.pilcher&#64;comcast.net</a>
============================================================ ============

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#27: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-10 19:16:28 by Will Trice

Elle wrote:
&gt; &quot;Will Trice&quot; &lt;<a href="mailto:wwtrice&#64;paragondynamics.com" target="_blank">wwtrice&#64;paragondynamics.com</a>&gt; wrote

&gt;&gt;Not sure what exactly you're referring to, but Graham does
&gt;&gt;not give what most people would call a &quot;mechanical&quot;
&gt;&gt;approach, IMO.
&gt;
&gt;
&gt; Given the context of my remarks, I think our difference is
&gt; semantical. Chapters of TII do indeed advocate (though not
&gt; necessarily exclusively) hard, black-and-white numerical
&gt; criteria to use to pick stocks. For example, the seven tests
&gt; Graham proposes in Chapter 14 for a &quot;defensive investor&quot; are
&gt; listed at
&gt; <a href="http://beginnersinvest.about.com/cs/valueinvesting1/a/101302a.htm" target="_blank"> http://beginnersinvest.about.com/cs/valueinvesting1/a/101302 a.htm</a> .
&gt; One can devise a very simply screener and apply these tests.
&gt; To me, that's &quot;mechanical.&quot;

Yep, I agree, we just had a semantic difference of opinion here. I
should note that often when I see websites or financial publications
reiterate Graham, they most often misquote him or leave out important
points. The website you give above actually covers all of Graham's
criteria for the defensive investor nearly verbatim.

To be faithful to these criteria requires a fair amount of research,
most web stock screeners I've seen do not have the ability to emualte
Graham's criteria successfully, even the ones that purport to screen on
his principles. You don't happen to know of a good one, do you?

-Will

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#28: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-10 19:24:37 by dapperdobbs

Bobby -

[Referring to your post of 11:22 am and your turbo tax results] If you
want to send me all the numbers, for $250/hr I'll do your math for you!
:-) You're doing good, looking at the numbers - that was what I
indicated you should do. It's just that the amount of help you're
likely to find in this forum is limited to suggestions.

A general rule for accounting is that if you have to struggle to
understand it, if you have to fill in blanks, if you have to rearrange
and recompute; then you're trying to make sense out of bad accounting.
I cannot interpret what you wrote easily. It does not tell me the
story, and, more importantly, I get the feeling it isn't quite telling
YOU the story, either. You should set up a spreadsheet to analyze the
numbers - all turbo tax is going to do is compute your taxes.

Tax difference between $850 and $4,600 = $3,750.
Taxable income difference is $14,000 (subject to limitations on
itemized deductions?)
$3,750 / $14,000 = 26%+

Your &quot;played with a bit&quot; and &quot;I don't remember the numbers exactly...&quot;
do not affect me at all. They do affect you, and you must get these
hard numbers precisely, to give you the guidelines to use for your
estimates and projections. These are YOUR numbers. (I'm not trying to
be offensive, guy :-) Lots of numbers can make one spin - work through
it until you know you have it right. It's not easy.

&quot;Of course it assumes that 4.7APY is the best I'm going to able to do
which may or may not be the case.&quot; That's the crux of the matter. As
you apparently want to get into real estate as a business, you must
make more than 4.7 to (financially) justify your business.

The comfort you feel with your decisions is of value. If you feel it is
right for you to pay off your mortgage, then doing so may free up your
anxiety, and make it easier for you to make more money. Some people
feel terrible wearing a suit; others feel terrible wearing a
sweatshirt. I wear sweatshirts all the time!

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#29: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-10 20:46:00 by Ron Peterson

Will Trice wrote:
&gt; Elle wrote:

&gt; &gt; One can devise a very simply screener and apply these tests.
&gt; &gt; To me, that's &quot;mechanical.&quot;

&gt; Yep, I agree, we just had a semantic difference of opinion here. I
&gt; should note that often when I see websites or financial publications
&gt; reiterate Graham, they most often misquote him or leave out important
&gt; points. The website you give above actually covers all of Graham's
&gt; criteria for the defensive investor nearly verbatim.

&gt; To be faithful to these criteria requires a fair amount of research,
&gt; most web stock screeners I've seen do not have the ability to emualte
&gt; Graham's criteria successfully, even the ones that purport to screen on
&gt; his principles. You don't happen to know of a good one, do you?

I have seen some good stock screeners, but they eventually disappear.
They all seem to be deficient by not screening on price/tangible book.
Another problem is different sectors vary considerably on their
fundamentals making a diversified portfolio difficicult to achieve if
only fixed criteria are used.

I eventually get a sample and look at a number of criteria to get a
tentative list which I look at when I have some free investment
capital.

--
Ron

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#30: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-10 23:03:28 by Elle

&quot;Will Trice&quot; &lt;<a href="mailto:wwtrice&#64;paragondynamics.com" target="_blank">wwtrice&#64;paragondynamics.com</a>&gt; wrote
&gt; Yep, I agree, we just had a semantic difference of opinion
&gt; here.

... though I agree the clarification could only help, here
at this newsgroup where so many newbies are lurking. It
would be terrible if they thought I meant TA when I wrote
&quot;mechanical approach.&quot; No way.

&gt; To be faithful to these criteria requires a fair amount of
&gt; research, most web stock screeners I've seen do not have
&gt; the ability to emualte Graham's criteria successfully,
&gt; even the ones that purport to screen on his principles.
&gt; You don't happen to know of a good one, do you?

:-) I confess I have not found an actual, single, free web
screener that will do exactly as the Graham criteria
requires. So far I've been using a composite of
Morningstar.com, finance.yahoo.com, fidelity.com (one needs
an account to get the data), and once in awhile, a company
web site, leading on occasion to routinely submitted company
SEC reports at the SEC site. The truly diligent will go
after the official SEC reports, as professor dapperdobbs has
reminded me once in a while.

At the moment I use an ordinary MS-Works spreadsheet and
copy the data from the above on it, with some refinements
from comments Graham-disciple Warren Buffet has made, and
some of my own preferences. It is not terribly
sophisticated. But I like to think it's better than a chimp
throwing darts.

For fun, you might take a look at the screening approach the
article at the link below describes. The author adapted an
msn.com screener to get his Graham picks, or nearso.

<a href="http://www.ndir.com/SI/articles/1202.shtml" target="_blank">http://www.ndir.com/SI/articles/1202.shtml</a>

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#31: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-11 01:16:56 by dapperdobbs

Elle - Re: that loosely-made comment about &quot;chimps throwing darts&quot;:
I'll have you know my Chimps are jumping all over the furniture,
ripping expensive upholstered couches to shreds, breaking every dish in
the kitchen, and they have now shredded a Persian carpet! It's nothing
more than Persian lint! They held a quickly organized committee
meeting, contacted their attorneys, and are preparing to file a
defamation suit against you (in California!). Their furious shrieks
prompted the neighbors to call the cops about the &quot;music being too
loud&quot;! You can imagine the Chimps' reddened eyeballs rolling around in
their heads, saliva slung all over the walls, teeth gnashing. I'm
locked in my office!

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#32: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-11 05:59:02 by Elle

:-)

Yes, professor, earlier I re-read the chimps comment and
agree it was terribly inaccurate. The fact is, having
adopted a heavily Graham-based approach, I feel a lot more
confident about the stocks I have (or am about to pick). I
have a sense of what their underlying value is; I know
they've all been around a long time, with steady (and mostly
increasing) dividends, and only positive earnings for the
last bazillion years. It doesn't feel like gambling. It's...
//investing// I am indeed in the frame of mind Graham
described in one of his chapters--I look forward to market
dives, so I can pounce and pick up more bargains.

I still do not live in California. Are you folks confusing
me with someone else? Anyway, tell the chimps they need
throw no more darts nor anything else. I shall settle the
claim by sending them a copy of the 2003 edition of Benjamin
Graham's gospel, with end-of-chapter commentary by Jason
Zweig applying Graham ideas to more recent market behavior.
Quite a good read.

Keep subtly mentioning Graham, and the little people like
myself will &quot;get religion&quot; soon enough.

Your writing style remains refreshing. I wish it were
contagious.

&quot;dapperdobbs&quot; &lt;<a href="mailto:GeorgeCFL&#64;hotmail.com" target="_blank">GeorgeCFL&#64;hotmail.com</a>&gt; wrote
&gt; Elle - Re: that loosely-made comment about &quot;chimps
&gt; throwing darts&quot;:
snip &lt;chimps are now snoozing, _Intelligent Investor_
clutched to breast&gt;

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#33: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-11 10:58:57 by MATTY

401k scenario, assuming 20% tax bracket
Put $5k of before-tax money in 401k - get back $1k extra on income tax
refund
After 30 years, $5k in 401k has grown to say $15K
After 30 years, $1k refund has grown to say $3K outside 401k
Distribute $15k, pay $3k in tax
Net = $15k - $3k tax - $5k investment + $3k refund - $600 tax on refund

= $9,400 profit


Roth scenario, any tax bracket
Put $5k of after-tax money in 401k - get back nothing extra on income
tax refund
After 30 years, $5k has grown to say $15K
Distribute $15k, pay nothing in tax
Net = $15k - no tax - $5k investment + no refund = $10k profit




not quite the right comparison...if you want to work it fairly you are
only taking 4,000 out of pocket in the 401k and comparing it to taking
5,000 out of pocket in the roth.to work it correctly take the 1,000 you
get back in tax savings in the 401k and invest that in a taxable
investment or ira ..now run the comparison figuring both at 5,000 out
of pocket...theres next to no difference.although you may be paying
some tax on the gains of the taxable investment its only 15% ,at least
right now.the problem with most roth vs ira comparisions is they never
reflect the fact that your putting less out of pocket in the
traditional ira

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#34: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-11 10:59:05 by MATTY

401k scenario, assuming 20% tax bracket
Put $5k of before-tax money in 401k - get back $1k extra on income tax
refund
After 30 years, $5k in 401k has grown to say $15K
After 30 years, $1k refund has grown to say $3K outside 401k
Distribute $15k, pay $3k in tax
Net = $15k - $3k tax - $5k investment + $3k refund - $600 tax on refund

= $9,400 profit


Roth scenario, any tax bracket
Put $5k of after-tax money in 401k - get back nothing extra on income
tax refund
After 30 years, $5k has grown to say $15K
Distribute $15k, pay nothing in tax
Net = $15k - no tax - $5k investment + no refund = $10k profit



oops i see you did allow for re-investing the extra 1,000 but you have
to figure taking an 18,000 distribution (15,000 plus the 3,000 outside
the 401k)....so 18,000 less taxes vs the roths 15,000....believe me its
so close if not the exact same thing if a traditional is used along
with the 401k...the main issue with the roth is flexability of
withdrawls but never the financial advantage illustrated most of the
time.

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#35: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-11 14:42:36 by MATTY

Roth scenario, any tax bracket
Put $5k of after-tax money in 401k - get back nothing extra on income
tax refund
After 30 years, $5k has grown to say $15K
Distribute $15k, pay nothing in tax
Net = $15k - no tax - $5k investment + no refund = $10k profit




PHEW! oooh man i finally got it straight...the problem in your scenerio
is you needed to figure the fact that you had to start with 6250.00 in
pre-tax dollars to have the 5,000 after tax dollars (6250 less 20%
tax=5000.00) to put in the roth.therefore your true roth cost is 15,000
- 6250.00 not 15000.00 minus,just 5,000 as you really paid 1250.00 in
taxes in advance in the case of a roth.......you cant take the pretax
amount in the regular 401k calculation as a cost basis without taking
the same pre-tax cost basis for the roth....i knew something was wrong
in your calculation as logic says they have to workout equal in both
cases,you know our government you get nothing extra assuming tax rates
stay the same.

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#36: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-11 17:05:18 by dapperdobbs

Hi, Elle!

(I told my Chimps about your proposed settlement. They settled down -
finally - and started asking for bananas again, whispering amongst
themselves, making page-turning motions with their hands, saying
&quot;BFFFFTTTT!&quot; and stroking their faces, so we'll see now if we can put
the attorneys back into their box and seal the lid.)

Very nice to hear what you said about investing. It feels really very
good to know I may have played a small role in leading someone else to
improve a portion of their life. I still like my analogy that the stock
market is like playing poker with all the cards turned face up on the
table :) (and the other players don't know the card ranks and can't
count). All one really has to do is work to get up to speed, and keep a
good poker face :) An individual does have significant advantages over
a fund manager, one of which is the freedom to do one's own research.
Btw, the chart on IR (Ingersoll Rand) is high, but the management
impressed me, in their conference call. They seem to be well focused
and cohesive on the logic and reality of making the business go, so I
doubled my existing position at $41.08. Keep in touch with me and I'll
proselytize you on the conservative use of equity options, for fun and
profit, of course!!

Thanks for your compliment on my (ahem) writing style. You write well
yourself, very organized, and you're very careful about your content
and references. I'm sure your portfolio will reflect the same care and
attention. Wishing you good eyes, and lots of very bad markets! ;-)

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#37: Re: Coming upon age 30, how's my plan going?

Posted on 2006-03-11 17:41:25 by Elle

&quot;dapperdobbs&quot; &lt;<a href="mailto:GeorgeCFL&#64;hotmail.com" target="_blank">GeorgeCFL&#64;hotmail.com</a>&gt; wrote
&gt; (I told my Chimps about your proposed settlement. They
&gt; settled down -
&gt; finally - and started asking for bananas again, whispering
&gt; amongst
&gt; themselves, making page-turning motions with their hands,
&gt; saying
&gt; &quot;BFFFFTTTT!&quot; and stroking their faces, so we'll see now if
&gt; we can put
&gt; the attorneys back into their box and seal the lid.)

Very generous of the chimps. Tell them I realize also that
some of their umbrage may rightly have been due to the fact
that chimpanzees throwing darts to pick stocks do in fact do
better than most six-figure salaried mutual fund managing
homo sapiens. Chimps are indeed one intelligent species.
Every investor should consult one.

&gt; I still like my analogy that the stock
&gt; market is like playing poker with all the cards turned
&gt; face up on the
&gt; table :) (and the other players don't know the card ranks
&gt; and can't
&gt; count). All one really has to do is work to get up to
&gt; speed, and keep a
&gt; good poker face :)

Yes, good one. Though I think one like yourself, who has a
lot of experience that has tempered his thoughts, can grasp
the implications more readily.

&gt; An individual does have significant advantages over
&gt; a fund manager, one of which is the freedom to do one's
&gt; own research.
&gt; Btw, the chart on IR (Ingersoll Rand) is high, but the
&gt; management
&gt; impressed me, in their conference call. They seem to be
&gt; well focused
&gt; and cohesive on the logic and reality of making the
&gt; business go, so I
&gt; doubled my existing position at $41.08. Keep in touch with
&gt; me and I'll
&gt; proselytize you on the conservative use of equity options,
&gt; for fun and
&gt; profit, of course!!

Don't think I won't consider that.

By the way, another may be joining your ranks of students
soon. Got an email this morning asking about whether to buy
TII or borrow it from the library.

&gt; Wishing you good eyes, and lots of very bad markets! ;-)

lol

I will not become truly wealthy on my investments, but I
anticipate having more wealth relative to others every year.
I liked poster Andy's analogy of this past week as well,
about how the goal may be not so much to avoid the grizzly
bear; but rather to make sure there's a guy behind one whom
the grizzly bear gets first.

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