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#1051 | |
Andy Reid Supporter
Join Date: Apr 2012
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Quote:
Are there different rates of interest I can select from any of those options? 5% interest in the account? 6? 8? That's what I'm wanting to find |
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Posts: 47,075
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#1052 | |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
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Quote:
You aren't guaranteed set rates unless it's a savings account or a CD. Savings accounts earn next to nothing (<1% interest). CDs maybe 1-2% but many require a fairly large deposit. All other options for 5%+ are related to investing and returns are not guaranteed. In these options you theoretically could lose the money you put in or make absolutely nothing. Do you have any retirement options through your employer? |
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Posts: 46,000
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#1053 | |
Andy Reid Supporter
Join Date: Apr 2012
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Quote:
Here's what I've got. -401k-6% employer match. Roughly 40k in so far. Thinking of adding more myself by adding 1-2% from my check on top of the 6%. -Roth IRA. Got that in January and have checked it twice. No big movement really. -Investing: I've thought about this a lot but haven't committed yet. Obviously I would choose a dividend stock, but haven't been sold on one yet. I've thought about safe stocks like AT&T and Coca Cola but am not sure that they are good long term stocks. I've thought about wanting something that people will still buy even in bad times. That led me to think of Unilever. |
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Posts: 47,075
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#1054 | |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
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Quote:
I like your thinking on the stocks. Unilever has had a massive jump in the past year. It's definitely a nice pick and relates to everyday products. It's been performing well. It's up to you if you think that continues and buy in now, or if you feel it's over-valued and wait. |
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Posts: 46,000
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#1055 | |
Politically Incorrect
Join Date: Feb 2009
Location: Scottsdale, AZ
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Quote:
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Posts: 51,528
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#1056 | |
MVP
Join Date: Mar 2004
Location: Helena, MT
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Quote:
The biggest effect of QE is that it removed toxic and illiquid assets from the books of the largest institutions, which were threatening to create accounting losses for said institutions at the time. This was the huge bailout. Also, large banks do need to have their leverage constrained because they create multiple layers of leverage by leveraging the holding company, resulting in far lower capital levels. The whole topic is frankly too complicated. That is without even getting into concentration risk management. Furthermore, there is no formal reserve requirement of ten percent tier one capital. While increased capital levels are being encouraged by regulators, the level of capital is evaluated with respect to the institution's risk profile. The assumption that reducing the reserve requirement will automatically increase lending is also erroneous. Loan demand has been weak for about a decade now. Furthermore, even if loan demand was stronger, the creditworthiness of borrowers you would be lending to with a lowered reserve would not be nearly as strong. The more competition increases for loans, the more concessions are made by the bank, the more likely the bank is to take losses on that loan. So rolling back regulations allows for increased malinvestment by institutions that have less capability to absorb those losses. Often time these are exacerbated by a dip in specific types of assets, which is where concentration risk comes in. Sound familiar? Sounds like 2007 to me. |
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Posts: 18,574
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#1057 | |
Fish are scared of me
Join Date: Nov 2001
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Quote:
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Posts: 40,694
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#1058 |
MVP
Join Date: Mar 2004
Location: Helena, MT
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Posts: 18,574
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#1059 |
Fish are scared of me
Join Date: Nov 2001
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Posts: 40,694
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#1060 |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
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Posts: 46,000
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#1061 |
MVP
Join Date: Aug 2003
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Posts: 10,620
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#1062 |
Politically Incorrect
Join Date: Feb 2009
Location: Scottsdale, AZ
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Posts: 51,528
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#1063 |
Andy Reid Supporter
Join Date: Apr 2012
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Wouldn't it just be better to increase my 401k monthly payment than invest in stocks?
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Posts: 47,075
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#1064 |
Supporter
Join Date: Apr 2007
Location: Scott City KS
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Posts: 57,475
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#1065 | |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
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Quote:
First determine if you like the funds offered in your 401k. Determine the expense ratios of the funds offered and if there are also employer 401k fees as well. If you don't like the funds offered, consider doing something else with your money such as maxing out your ROTH IRA into funds of your choosing. People in high tax brackets generally like decreasing their income tax by increasing their 401k contributions for the year. This depends on if your state has income tax, as something like 10 do not. If your goal is to pay less taxes, increasing your 401k is a good option for many. Some in your situation would say investing in individual stocks is another way to diversify and is much more liquid that placing money in a 401k. Mind you, this doesn't have to be individual stocks either but could be indexes, mutual funds or ETFs that track a sector of the market. These are generally less risky than owning individual stocks outright. If you don't have a large emergency fund to tap if times get tough or you were hit with a large bill, withdrawing 401k money comes with an early withdraw penalty plus paying capital gains tax (ouch!). That's why withdrawing 401k money should be one of the last options for those in desperate need of money. If money was instead invested in a brokerage account, you could sell those stocks at any time to access the money, either paying capital gains tax for winners or getting a tax break for losers. Either way you slice it, this money is easily accessible at any time though. Hope that helps! |
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Posts: 46,000
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