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Old 03-13-2010, 10:26 PM
 
Location: Great State of Texas
86,093 posts, read 72,683,571 times
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Well said mathjak107..can't rep ya - gotta spread the wealth a bit.

I started right after you in 1989 and followed the same routine. I'm also with Fidelity for both my 401K and my own personal investing. Every Christmas I sit down and take stock of my finances and go through all my investments. I plan on taking an early retirement in 2012 myself.

Now I did see the financial disaster coming when Lehman and Bear went belly up and moved 100% into a stable fund in the 401K. Better to sit on the sidelines for a while then to fret and do something stupid. I did luck out with timing. Many of my peers at work were not so lucky..and are still trying to recoup.
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Old 03-14-2010, 04:30 AM
 
72,180 posts, read 72,150,380 times
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the point is being succesful is easy, its not about luck or skill ..its merely just following thru whatever plan you put together... as long as your consistant long term most asset classes pan out.

how about the fact that even if you bought gold at the peak of 1,000 bucks 30 years ago as part of your portfolio if you kept the discipline of rebalancing your portfolio every year and buying more of that loser gold as it plunged to 285 dollars over the next decades , today you would have averaged over 9.2% annual gain on that gold.. for comparision stocks averaged 9.8% over the same time frame.

its all about discipline and carrying out a working plan...


but its easier to blame the investment vehicles, wall street and global warming and those folks who invested badley by speculating and calling it investing will never change their views or their wealth.

they much prefer the guaranteed losses after taxes and inflation of a bank account with noooo hope of getting ahead. they will remind everyone how poorly other investments do and how they are being ripped off..

then you get the crowd who buy long term investments like equities and then expect it to be up short term and earn them money from day 1. they forget that if they track their money that already paid its long term dues that its up over 1000% .... so they bail and go back to a money market.


the best is those that buy 1 or 2 high risk stocks their brother inlaw told them about, they loose their money and then spew how the markets wiped them out.

there is always a reason for those loosers ...... but there is alaways a reason for the winners too. they take an interest, they understand what they are buying , they cover all the asset classes and they let time do its thing!


the other thing is folks get a little dopey too in there thinking. they base everything on the peaks but yet none of us would ever expect to catch the exact high or low when selling a stock... folks like to say they are still down 10% but they are really up 1000%..... if you bought goggle at 90.00 and sold it at 600 you are saying how great you did but if you bought google at 90, it hit 800 and it dropped to 600 and you sold it at 600 before it fell further then in your mind you lost 200 in the drop..... would you say you lost 200 if you sold at 600 and it went on to 800 without you?

Last edited by mathjak107; 03-14-2010 at 05:17 AM..
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Old 03-15-2010, 05:40 AM
 
Location: Tampa, FL
27,798 posts, read 26,297,115 times
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Quote:
Originally Posted by mathjak107 View Post
i dont know anyone who has a 401k that isnt in control themselves where the money goes. these financial failures just choose not to take an interest , learn the basics and then ask there useless buddy what to do. i see it in my own company
Disagree. I doubt that many people understand where their money is going and they probably don't move their money around much when they have decided to invest in the plan.
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Old 03-15-2010, 05:56 AM
 
72,180 posts, read 72,150,380 times
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guess again, check out morningstars new tracking of small investor money in and out of each fund..

the flow of money in and out shows small investors are killing their returns..

every fund now has a small investor return given,., its based on the flow of money in and out of that fund ,, it shows they pull money out when they should be adding, and increase equity holdings when things have already risen.. the average equity fund is showing between a 3-4 % return for the average small investor vs almost 9 for the funds over the same time frame.

pretty much it confirms the typical small investor does the wrong thing most of the time...

i find in our own company its not so much they switch into other funds as much as it is they panic and pull out altogether after the drops.

Last edited by mathjak107; 03-15-2010 at 06:17 AM..
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Old 03-18-2010, 07:24 AM
 
48,516 posts, read 84,124,097 times
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Quote:
Originally Posted by mathjak107 View Post
i agree with you about lower income earners especially young ones starting their careers doing a roth... the jury is out as far as whether we will all see higher income taxes or not though. tax rates have automatically been dropping for over 30 years every year... thats alot of history with soaring deficits .

each year allows more and more thru at lower taxes, whoever imagined earning 68,000 bucks and if your married being in the 15% bracket.....

next year will see us cross into the 70 thousand range for 15%... i remember earning 50,000 and being in the 25% decades ago

180 million voting retired baby boomers says income taxes stand a real good chance of not going up as every political party fears telling us we are raising your income taxes... we will see everyother tax soar in my opinion but i think the middle range of income taxes will stay sacred for at least the baby boomer generation.

no one can really argue either way as we all dont know but my planning is always based on what was,what is and what makes sense of being.. there are soooo many what if's and so many things that look like its the only outcome and then some event not even on the radar knocks everything off course.

dont forget every major downturn comes from good times, when things couldnt look better and VOOM right to the basement we go.

the reverse is true too, every bull market starts from the depths of hell where the word stocks makes you vomit.

with all the hyper-inflation predicted and the wild spending the long term bond market looking out 30 years is only around 5%. historically its around 7% so what the heck does the bond market see that we all dont?

remember when we all used to laugh at the rates on a passbook savings account? who ever thought 40 years later with all that wild spending and predicted inflation we would be getting less than 1/2%.....


i like roths but not for any tax savings we may or may not see as compared to a traditional ira or 401k ,but i love them for transfering whatever is left over when my wife and i are done to our beneficiaries.

.. i read thru a roth legacy trust you can go 150 years with no taxes and compounded growth providing over a century of tax free withdrawls at the same time. how amazing is that.

ed slott is the master at all this and im just going to start reading his book over the weekend.


using roths , trusts and single premuim life insurance he has methods for transferring amazing amounts of money from your estate without the tax man killing you.

do you know there was a tax case a few years ago where an estate was inheirited by the kids. the estate taxes, death taxes, income taxes on the estate and income taxes on the kids share came to more then the estate was worth. THE KIDS ACTUALLY OWED MORE THEN THEY GOT.

they took it to tax court and the irs admitted they fouled up and nice guys that they are, we now have a law that says you can never owe more then you get.... NICE OF THEM.! WE CAN ALL REST IN COMFORT KNOWING OUR KIDS CAN NEVER OWE MORE THAN 100% OF WHAT WE PASS ON TO THEM.


thats why tax planning is so important, and it looks like the biggest guns are trusts, roths and life insurance.

if you'all are really interested in this stuff ill keep you posted as i get an education in this stuff.

Just look at projections and there is no way we are not going to see higher tax rates across the board in the future. Betting against that is like betting the government is goig to redcue spending massively to reduce the huge deficits. Even CBO talked the other day about the military spending reductions seen in the past not being anyhting that will work now. In fact reductions on the order of the past will not even hit the interest on the debt much.
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Old 03-18-2010, 09:09 AM
 
8,242 posts, read 11,959,504 times
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Originally Posted by texdav View Post
Just look at projections and there is no way we are not going to see higher tax rates across the board in the future.
Sure tax rates are going to go up, but I doubt very seriously that it will be across the board. More likely, it will be at the upper end where the rate now is around 1/2 of what it used to be. All through the 1950s and early 1960s the top rate was over 90%. In the rest of the 1960s and 1970s the top rate was between 70% - 77%. Reagan lowered it to 50% in 1982 and it was lowered further in 1988 to 28%. That was the lowest rate since 1916. Although it's crept back up a little since then to 35%, it still is nowhere near where it was as recently as 1982. (or 2002 for that matter).
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Old 03-18-2010, 04:06 PM
 
48,516 posts, read 84,124,097 times
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Well if you beleieve thwe economist it will take a rise in taxes like never before to get the deficit under comtrol. They are projecting a average of 3.5% grow thru 2040. That and the fact that unlike the past deep cuts in militaryy budgets. These defcit with interest means proabvly both riased taxes and fees puls program cuts to get under control.Its a different ball game than in the 1990 when militray budget ;cuts.higher upper income rates and high growth was used.
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Old 03-18-2010, 04:19 PM
 
72,180 posts, read 72,150,380 times
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i still say no political partiess will tell 80 million retired or retiring baby boomers they are raising the income taxes of the masses. i dont see it in the cards at all. i do see the upper end getting nailed though.


the deficits will be re-financed thru bond sales forever . the debt wont be a factor in my opinion. unless the world stops buying our debt and even at next to zero rates that hasnt happened.

in fact the dollar was falling because central banks around the world were selling dollars and buying you know what? TIPS. yep good ole american inflation proof treasuries . they were doing it as a hedge to stay invested in america and hedge against a potentially falling dollar.. the tips arent counted as dollars even though billions went into them ,... when those are sold and converted back to dollars watch the dollar soar

Last edited by mathjak107; 03-18-2010 at 04:49 PM..
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Old 03-18-2010, 09:02 PM
 
8,242 posts, read 11,959,504 times
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Quote:
Originally Posted by texdav View Post
They are projecting a average of 3.5% grow thru 2040.
You've got to be kidding. Growth projections are notoriously inaccurate just from one budget year to the next. And you seriously want to rely on projected growth rates over the next three decades?!
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Old 03-19-2010, 03:12 AM
 
72,180 posts, read 72,150,380 times
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ha ha ha a 30 year projection? can you think of even 1 year that wasnt revised by the following year ?

after world war ii the us was a debtor nation ... volumes were written how within 20 years we would all be shopping with wheel barrows full of money as hyper inflation was a given off in the near future.

well here we are decades later , debt higher then ever and fighting off deflation... if anyone thinks they are predicting this stuff do yourself a favor, at least put your predicting skills it to good work in las vegas..(you can visit madman besides)
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