Tell me if I am dumb... with money!

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Ice Cream Jonsey
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Tell me if I am dumb... with money!

Post by Ice Cream Jonsey » Mon Sep 29, 2008 1:29 pm

A couple months ago, I changed my 401(k) to send all money into bonds. I plan on leaving it like that till the end of the year and then re-evaluating.

I did not move the money that was in other things. I had diversified throughout the 15 or so options they give us. I left the money in those funds alone. So it's just all the new stuff.

Is this moronic? YOU CAN NOT HURT MY FEELINGS. I don't know anything about money. I am doing this so I don't deposit money into the 401(k) and immediately lose it. But I don't know if that is wise.
the dark and gritty...Ice Cream Jonsey!

Casual Observer
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Post by Casual Observer » Mon Sep 29, 2008 2:08 pm

Cash is king, as of today people are happily buying treasury bonds at prices/yields to receive less than what they are paying for them. The Dow is down 777 points today so funds are taking big hits. One of the sales reps in our company is bragging that his dad "has a million dollars in his mattress that he took out of the stock market in April".

I'm happy to possess only debt, really old and hard to collect debt and i am expecting to greatly benefit from the declining dollar value of the debt and desperate banks willing to settle.

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Ice Cream Jonsey
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Post by Ice Cream Jonsey » Mon Sep 29, 2008 2:22 pm

Along the same lines, I have now seen three chain emails trying to argue that the $700 billion should be given directly to taxpayers, and the NUMBERS ARE WRONG.

The last one had $700 billion / 150 million taxpayers = a check for $660,000 each. So we'd each get a check for that much. That was the guy's math and his plan.

I swear to you I am not making the above up. It's out on the Awful Forums right now if you want to catch it.
the dark and gritty...Ice Cream Jonsey!

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AArdvark
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Post by AArdvark » Mon Sep 29, 2008 5:54 pm

Think what would happen if all of a sudden everyone 18 and over was suddenly debt free. Yeah it sounds good to me too, but think. Suddenly everyone is flush with money and they all want to buy stuff (demand) which would make inflation soar through the roof. Too much money after a limited amount of goods. Sure, it'd spark the economy, Hell, I'd pay off the house and and buy a new car. So would everyone else.

Diversifying the 401 plans is a good idea. Shouldn't have all the eggs in one basket. Where's Kingie to weigh in on this, he's a money kind of guy. I got forty percent in aggressive plans and forty percent in 'old money' stuff. The rest is in overseas plans. So far so good. But I'm not worried about maximum returns.

THE
I SHOULD LIVE SO LONG
AARDVARK

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Ice Cream Jonsey
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Post by Ice Cream Jonsey » Tue Aug 20, 2013 11:17 pm

Da King has withdrawn from my fantasy football league and no longer visits my BBSs or takes part in my projects. So that is sad. But yes, he is good with money. I am sure he is sitting on a million bucks at this point.

Anyway, is the statement I am about to make true?

As I said in the Warlords thread, I put some amount of money into my 401(k) over the last 3 months. Let's say it was 400 dollars.

My 401(k)'s performance lost 500 dollars over the last 3 months.

That said, I still "bought" shit with that 400 bucks, right? Like, if I had 10 shares of some awful fund and its value dropped, the money I put into the fund "bought" shares? So if the value goes up, I have more shares than I did originally?

Is that true?
the dark and gritty...Ice Cream Jonsey!

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Post by RetroRomper » Thu Aug 22, 2013 10:38 pm

/venting

The whole 401(k), 403b (or whatever), Roth IRA, etc. just really turns me off: I have to essentially gamble with my money so that I may (MAY) have enough to live off of in thirty five years?

Jesus bloody Christ on a graham cracker, everyone is being asked to essentially become a financial guru and invest in the stock market.

Thank the bloody gods my job still has a pension, but even that is being phased out... ::sigh::

/venting

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The Happiness Engine
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Post by The Happiness Engine » Sat Aug 24, 2013 8:52 am

You basically own %x of the fund. x is very,very,very small. Whenever someone buys y new shares, your x goes down by y over some really huge number. Don't worry about that part.

The value of your part is the total value of the fund times x. So yes, if those dumb-asses somehow magically double the value of the fund tomorrow, your "investment" would double as well. If they lose %50 of the total value of the fund tomorrow, same thing happens to you.

Pensions worry me far more because it's the exact same "I am giving my money to the bottom-rung financial guys and just hoping it works" but anywhere down the line those morons in charge can run the company into the ground and say, "Welp, looks like we're taking the pension fund and giving it to the banks! Sucks to be you assholes!"

Kodak is a notable example of a judge for once not letting that happen.

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Post by RetroRomper » Sat Aug 24, 2013 3:28 pm

My pension is backed by the State of California, reinforced by over 150 years of union decisions and is locked down harder than Bradley Manning's prison cell, soooo I'm less concerned with that in my case. The gambling and always staying on top of my 401k / Roth IRA thing disturbs me though...

Are there any real alternatives?

And if there aren't, how much should I be putting away?

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AArdvark
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Post by AArdvark » Sat Aug 24, 2013 3:32 pm

Invest in something that won't lose it's value in thirty years and you can sell for a profit. Something that there will always be a market for. My grandfather had this kick-ass coin collection that was appraised for about $100,000. after he died. I only saw it one time and I was about eleven years old so I don't remember much about it.

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Post by RetroRomper » Sat Aug 24, 2013 4:26 pm

Guess I should have gotten on the Beanie Baby Bandwagon then...

Image

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AArdvark
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Post by AArdvark » Sat Aug 24, 2013 8:51 pm

Got it

(EDIT) Don't got it, It's the Princess Di bear I got.
Last edited by AArdvark on Sun Aug 25, 2013 7:57 am, edited 1 time in total.

lethargic
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Post by lethargic » Sun Aug 25, 2013 12:08 am

"Tell me if I am bad with money"

You bought a motorcycle. :mrgreen:

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AArdvark
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Post by AArdvark » Sun Aug 25, 2013 5:59 am

Think of the money he'll save on gas.

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The Happiness Engine
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Post by The Happiness Engine » Mon Aug 26, 2013 5:40 pm

There are no real alternatives. You should be maxxing out the legal limit every year, unless you need that money for bullshit like food or housing.

dog-shit funds average %5 a year. My savings account currently returns 0.5%. What can you do? You can try just buying blue-chip stocks (Dupont is never going bankrupt and issues dividends) but then you're just taking the hassle of "guy who isn't good enough to get the good jobs in finance" on yourself.

My advice is to hope that when you retire it's a boom instead of a bust. Maybe cash it all out and spread it across multiple currencies if you want to be paranoid.

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Post by loafergirl » Sat Nov 02, 2013 8:53 am

Part of it depends on what you have to invest. I am by no means an expert BUT...

For the kids college accounts they are thrown into savings until they can be rolled into certificates when they mature, and then there is also a small amount put into 529 plans. The 529 plans kinds of suck because the stock options are a little tricky and vague, and I have some moral reservations about a lot of stocks offered (tobacco was a big one for a while as well as big Oil).
Certificates are a pretty secure investment but the yields are usually kind of small (though it depends on the rates at the time, the amount you have to invest and the length of time you are investing). There's usually a penalty if you pull funds early for some reason.
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RetroRomper
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Post by RetroRomper » Sat Nov 02, 2013 11:19 pm

Federal Bonds are my go to drug of choice at the moment (but I believe the yields are low or something that discourages investment), while I'm almost afraid to (for various reasons) touch a Roth IRA or 401k just due to the inherent complexity / gamble involved.

Though to be honest, part of it is my distaste for the whole system of having to save 60% of each and every paycheck so I can continue to live in an apartment after the age of 50.

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Post by loafergirl » Sun Nov 03, 2013 9:22 am

You can get Roth IRA certificates (primarily eliminating the risk).
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Tdarcos
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Post by Tdarcos » Sun Nov 03, 2013 10:09 am

Ice Cream Jonsey wrote:That said, I still "bought" shit with that 400 bucks, right? Like, if I had 10 shares of some awful fund and its value dropped, the money I put into the fund "bought" shares? So if the value goes up, I have more shares than I did originally?

Is that true?
If the underlying fundamentals of the fund are still right, then, yes. Same as computers, garbage in = garbage out. If it's not a good fund it doesn't matter how cheap you got it, (Right now, Enron at 10 shares for 1c would be overpriced unless you were buying it to get the nice paper.) Technically, what you're supposed to use is "dollar-cost averaging" where you average all of your purchases of a particular stock or bond. This way the times you're "lucky" and get it before it goes up - if you're a buy and hold investor - make up for the times you miss. Because you can't always get the timing right, sometimes you buy at a top or sell at a bottom.
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Post by Flack » Sun Nov 03, 2013 10:54 am

That's pretty good advice.

TDarcos, would you say you're more of a top, or a bottom?
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RetroRomper
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Post by RetroRomper » Tue Jan 07, 2014 7:18 am

Believe we can all agree that the fact Tdarcos did not answer that question makes the world a better place.

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