patrick.net

HeadSet says

I am letting dividends pile up in a MMSA that pays about 4%. Where are you keeping your cash while you wait for the indexes?

For the Vanguard account, funds sweep to VMFXX, which is all right by me. ETrade is total sh*t since being bought by Morgan Stanley. I think they sweep to a MS bank account (for you safety! I was told when I called) that pays like .1%. So some of that I put in CLIP (short term treasuries) and the rest to VMFXX. These are all in retirement accounts. YMMV.

SharkyP says

I am up 33% so far, have recently moved much of my money into CLOs.

I had to look up CLO - first hit was "Collateralized Loan Obligation". How does a retail investor move into CLO's and why would you?

TIA.

clambo says

the prospect of lower oil and energy prices.

This. The inflation has happened already. Prices will stay where they are and margins will increase. Some brands might have to cut prices a bit. In my world Biden actually did a good thing for Trump. Not intentional.

Hauling shit up and down the Mississippi. LA to Denver. Chicago to Indianapolis. New York to Nashville. If that shit gets cheaper to ship profits go up. I know some energy prices are contracted at a set price like airlines and probably ships. But if you're the guy eating ramen noodles because you can't pay for gas, you're going to end up spending more with cheaper gas.

Also profits on LNG being exported to Europe will go up. I don't like predictions, but if Trump is drill baby drill it's gonna be good. Anyone on here have oil fields, fracking, natural gas pipelines around them? Natural gas is a biggie by me. Cleanest sites for a major energy corporation. The environmentalist just need to get over it. Get over the gay and trans shit as well.

Hopefully the Democrats will finally open their eyes (not actually hopeful). You know who benefits from lower gas prices equally? LGTBQ weirdos. Us right wing nut jobs WANT to help you. Have a 401k, lower energy HELPS you. No one is out there beating gays and trans people... besides Juicy Smolett, self inflicted.

I don't trust the MAGA transition is done, but it really is a party of the people. I think people are seeing the Dem party has failed them. R's ain't perfect with the RINO class, but it's better in the House for sure.

Gotta get these geezers out of office, specifically Congress (sorry patnet geezers). Congress should be 35-55 at oldest. I like Clarence Thomas, but he needs to retire so SCOTUS is secure and hope Sotomayor drops dead. Not a threat as I have ZERO interest in going to DC. Been there done that. And whoever plans to run in 2028, plant your seeds now. The Dem bullpen is empty so get a head start. Simple as just stating I want to run. Trump is a lame duck, so it won't bother him.

What the heck happened this afternoon that caused the stocks to plummet?

Maybe Fed comments implying they will not be able to cut rates any further because of inflation.

Patrick says

Maybe Fed comments implying they will not be able to cut rates any further because of inflation.

I thought I scored well two days ago when I bought Ford on a quick dip to $9.95 and it settled back up to about $10.07. Now the gods laugh and Ford plummets this afternoon to around $9.70. The rest of my portfolio fell over $50k in just 1 hour or so after 3PM. These market reactions usually reverse themselves so hopefully it will recover of the next few days.

This country has been running on fumes ever since 2008. Take the red pill and enjoy the decline. Oh, and learn 18th Century skills - you'll need them.

Wow, stocks continuing to fall. Maybe a buying opportunity?

They didn't fall today.
It's always a good time to buy stocks unless you've only got a few years left to live.

clambo says

It's always a good time to buy stocks unless you've only got a few years left to live.

I bought the Ford because at below $10 price, the dividends are 6% and I can only get about 4% now in new MM or CDs.

With just a few exceptions, I have bought mutual funds and not individual stocks.
I don't focus much about dividends, although mutual funds pay them too.

clambo says

With just a few exceptions, I have bought mutual funds and not individual stocks.
I don't focus much about dividends, although mutual funds pay them too.

High dividends would scare me unless scaled in a fund as you say. The price is generally going down if the dividends are going up. You can reinvest dividends and get more on the back end, but if price drops 5-10% was it worth it?

REIT's are your best bet for low risk, long term investment. I don't play the short term gambles. If you're 60 I'd stay away. 40-50 you should be able to recover from any market correction by retirement. Apartments need to be built. Better than a CD for sure unless you pick a shitty fund. But it's safe money.

HeadSet says

I bought the Ford because at below $10 price, the dividends are 6% and I can only get about 4% now in new MM or CDs.

Enjoy the divvies unit it comes back?

The CEO of Ford drives a Chinese EV. Specifically the Xiaomi SU7 electric sedan.

WookieMan says

High dividends would scare me unless scaled in a fund as you say. The price is generally going down if the dividends are going up.

Yes, and there's another risk I ran into myself.

One of the iShares funds paid out a whopping dividend shortly after I bought it. I think it was something like 15%. The share price itself fell the identical amount on the day of the dividend, which is normal when big dividends are paid out. Almost like a physical law, "conservation of money".

But then I owed income tax on that dividend, which was really just my own money given right back to me. And I think the tax was at the highest marginal rate. So I lost by getting a dividend.

That's the problem with retirement - no income, so no ability to stash stuff in tax-free retirement savings accounts. Not to mention no conventional lenders will give you a loan to buy property. If you have a big enough nut, you can borrow against assets like the billionaires do.

Then again, @Patrick since your wife still works, you can use that the funnel mo' money into the retirement accounts.

Don't forget to match the kids' earnings with Roth IRA contributions - compounding since age 16.

stereotomy says

Patrick since your wife still works, you can use that the funnel mo' money into the retirement accounts

We could put more in her Roth IRA, and probably should. Maybe she could contribute to an individual IRA as well, not sure.

Schools don't have regular IRA accounts, but instead have something called https://www.calstrs.com/

Patrick says

stereotomy says

Patrick since your wife still works, you can use that the funnel mo' money into the retirement accounts

We could put more in her Roth IRA, and probably should. Maybe she could contribute to an individual IRA as well, not sure.

Schools don't have regular IRA accounts, but instead have something called https://www.calstrs.com/

I worked at a university, so yeah the teacher retirement is really juicy. The thing is you have to work the full stint to get it. Women and minorities can probably pull the stretch, but any time someone needs to be let go, it's always the white man.

I guess you'll be funneling stuff to the critters.

Patrick says

Schools don't have regular IRA accounts

? IRAs are not employer vehicles. Did you mean 401K?

stereotomy says

Not to mention no conventional lenders will give you a loan to buy property.

Why do you care? If you are retired, wouldn't you already have a paid for house, along with IRAs and other savings?

HeadSet says

Patrick says

Schools don't have regular IRA accounts

? IRAs are not employer vehicles. Did you mean 401K?

I guess I do mean a 401K, but every time I left any employer, I immediately rolled their 401K into my self-directed 401K rollover, which is very much like an IRA. So I conflate the two.

Patrick says

We could put more in her Roth IRA, and probably should. Maybe she could contribute to an individual IRA as well, not sure.

If she has an employer sponsored plan then she cannot contribute pre-tax to an IRA (she can contribute to a ROTH).

You, however, can contribute to your IRA on a pre-tax basis so you can reduce your AGI. Google "spousal IRA". As long as she has income it doesn't matter if you do.

Also, PSA - there is a special 401k "catch up contribution" for 2025 as long as she is between 60 and 63. It's $23,500 max contribution with a catch up contribution of $11,250 for a total of $34,750. I think this is a one time opportunity for 2025 only.

Patrick says

We could put more in her Roth IRA, and probably should.

I'm aiming for a million in that alone. Halfway there, haven't taken a paycheck (willingly) in 3.5 years (plenty of savings, RE, stock and crypto income but savings mainly which will dwindle) and have been dumping all I can in an HSA, mega backdoor Roth and some in a 401K just because there is a roth limit. I'll roll that over someday as well.

HeadSet says

? IRAs are not employer vehicles.

They are, they are just called 401-Roths and fully convertable.

stfu says

Also, PSA - there is a special 401k "catch up contribution" for 2025 as long as she is between 60 and 63. It's $23,500 max contribution with a catch up contribution of $11,250 for a total of $34,750. I think this is a one time opportunity for 2025 only.

Dude, combined I've been socking away around 70K in 401k + roth 401k for the last few years:

"In 2024, the mega backdoor Roth limit is $69,000 or $76,500 (includes $7,500 in catch-up contributions) if you're 50 or older, compared to $23,000 or $30,500 if you're 50 or older in pre-tax contributions."

https://www.nerdwallet.com/article/investing/mega-backdoor-roths-work

I wasn't 50 when I started but am now. I sort of suspect you already know about this but just in case...

Amped the fuck out of it trading bitcorn using an etf on Fidelity.

Nice thing about Roth's too is that they aren't considered against you social security tax burden. Not that I really expect to get much if any of that. I do expect taxes to be much higher in the future though - that's usually the argument I see between people picking 401K type vehicle (pre-tax) vs. Roth (post-tax).

Go for the Roth Pat!

@Maga_Chaos_Monkey I've got a Roth and so does my wife. We should really max them out.

I've read that Peter Thiel invested his Roth money into Facebook early on somehow, so now it's worth more than $5B, tax free:

https://www.marketwatch.com/story/how-peter-thiel-turned-2-000-in-a-roth-ira-into-5-000-000-000-11624551401

Maga_Chaos_Monkey says

Nice thing about Roth's too is that they aren't considered against you social security tax burden

Congratulations on maxing out your retirement savings space. Note that most people are limited by employer contribution limits and match and cannot reach the theoretical pre-tax contribution limits (which have to be north of $65k per year by now?). For most of us without access to Mega back door it is the $23,500 limit and possibly catch up contribution.

You are also fortunate to have a plan administrator that allows for Mega Backdoor Roth conversions - I was in two different fortune 500 company plans that did not allow for this - during my peak earning years where I could have actually afforded to do it.

Also note a caveat on ROTH's; a ROTH IRA does not count in your RMD calculations, whereas a ROTH 401k does. RMD's are a sinister mechanism which means many of us will be paying a higher marginal tax rate at 76 than we did at 56.

Patrick says

Maga_Chaos_Monkey I've got a Roth and so does my wife. We should really max them out.

HSA if she can get one. You can take the money out anytime you want. It's tax free. You'll have medical bills at some point, just be meticulous about keeping the receipt from any procedure you pay for. Double check as my research is 4 years old or so. Given it's something you'll have to pay for at some point, build that up as a buffer you can grab from if needed. Or for the medical bills themselves.

We don't talk shop, but I've been begging my wife to see if her company will do an HSA. We're still young enough to invest 20-30 years worth and if a health issue comes up we're cover. I can't remember the limits anymore. Key is you can invest and gain interest like a 401k and take money out penalty free. Not accounting/finance advice, so double check. Another good avenue for compounding your saving and not tying them up in accounts you shouldn't touch. I believe safe from BK as well.

Asset protection is our biggest goal. We'll put enough away. I don't want to wish away 19 years, but I'll at least be in the Caribbean sitting on my ass on a beach.

Anyone can buy his own HSA; just go to Fidelity.com and buy it.
I found their setup extremely easy.
Put capital appreciation mutual funds in it; my HSA is Fidelity Contrafund.
They sent me a debit card which is what I can use to pay for dental, vision, medical, etc.

Dental work is expensive sometimes, even with Delta Dental insurance; I use my HSA sometimes to pay the dentist.

Patrick says

I've read that Peter Thiel invested his Roth money into Facebook early on somehow, so now it's worth more than $5B, tax free:

Now think about who inherits this. An inherited IRA, even a Roth IRA for some reason, must be withdrawn completely by the heir within 10 years.

Thiel is gay, so he's unlikely to have any natural heirs.

My bet is that he donates it all to some foundation he sets up.

Patrick says

I've got a Roth and so does my wife.

I don't know why I would have thought any differently other than too much eggnog last night haha..

stfu says

Also note a caveat on ROTH's; a ROTH IRA does not count in your RMD calculations, whereas a ROTH 401k does.

This IS interesting, I did not know... I do roll my roth-401k into my roth-ira every year though with no consequences. It pisses Fidelity off though and I save a lot on fees.

WookieMan says

HSA

Those are great too and I've maxed mine out for several years. There is a sharp limit to how much you can put in them though.

stfu says

RMD's are a sinister mechanism which means many of us will be paying a higher marginal tax rate at 76 than we did at 56.

Yep, and when the time comes that I have to take RMDs. I will one of those at the high marginal rate. I mostly did the traditional IRA and invested the tax savings because I thought I would have a lower income after retiring and be in a lower tax bracket.

WookieMan says

HSA if she can get one. You can take the money out anytime you want.

I'm got an HSA myself, but it's almost empty because I used the money on various medical things. Also, it's at my local credit union, which does not allow investing or trading in it.

clambo says

Anyone can buy his own HSA; just go to Fidelity.com and buy it.

I suppose my wife could do this, but I think you have to be on a high-deductible health plan (HDHP) in the years you donate to it, and she's not. She gets insurance through the school.

Patrick says

but I think you have to be on a high-deductible health plan (HDHP) in the years you donate to it,

correct