Retirement Investing, Your Thoughts - BMW Luxury Touring Community
 
LinkBack Thread Tools Display Modes
post #1 of 14 Old Sep 10th, 2007, 3:44 pm Thread Starter
Senior Member
 
Gizmo1137's Avatar
 
Join Date: Jul 2007
Location: Phoenix, Arizona, USA
Posts: 635
Retirement Investing, Your Thoughts

I am curious to read a discussion of your thoughts on the pro's & con's of investing the full allowable amount to one's 401K vs a portion of the full amount, say the company match, then investing the rest into a separate IRA account.

Regards & Ride Safe!

Bruce
'09 Black LT
4-Wheels moves the body, 2-wheels moves the soul.
IBA # 8547
Gizmo1137 is offline  
Sponsored Links
Advertisement
 
post #2 of 14 Old Sep 10th, 2007, 4:23 pm
Bouncer
 
eljeffe's Avatar
 
Join Date: Apr 2002
Location: Allen, TX, USA
Posts: 9,315
It all depends on how your company's 401K is structured. My company has a myriad of fund options, so I do my research, and make the maximum contribution up to the IRS limits. Given that my selections have historically been returning the 13-19% range (depending on fund and risk), I feel I've done very well with a 401K. Given that I receive no tax benefit from an IRA (roth or otherwise), I've gone with a defined benefit plan.

In my opinion, if your only 401K option is to invest in your company's stock, then I would find an alternative (visions of Enron running through my head).


To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.

__________________
El Jeffe
Plano, TX
'06 K1200GT Crystal Grey
'04 Sprint RS Caspian Blue

__________________

"I am hoping for an asteroid impact to put all this climate change nonsense to bed."
-
To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.
eljeffe is offline  
post #3 of 14 Old Sep 10th, 2007, 6:58 pm
Senior Member
 
DavidTaylor's Avatar
 
Join Date: Apr 2002
Location: San Jose, CA, USA
Posts: 7,565
The benefits of pre-tax deductions, as well as company matching if offered, make 401Ks a good investment opportunity. Some research, either on your own or with a financial advisor, can help identify funds that will apporpriately diversify your contributions to get you the best return for the amount of risk you are willing to take.

David Taylor
San Jose, CA
2010 R1200RT Polar Metallic
AMA, BMWMOA
Booze Brother #4

The shortest distance between two points is for people who don't ride!



To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.
DavidTaylor is offline  
 
post #4 of 14 Old Sep 10th, 2007, 7:17 pm
Senior Member
 
UltraLT's Avatar
 
Join Date: Jan 2006
Location: Charlotte, NC, USA
Posts: 687
Investing - a different view

How have you all enjoyed the roller coaster ride in the market these days? Do you get the feeling that someone is getting well off, but it isn't you? Are you looking forward to the inevitable crash of the market if the Democrats win the White House?

What I have done is move my IRA and 401-K money to a self directed IRA and invested in select real estate. Believe it or not, now is the time to do that, you just got to be selective. There are some real deals out there right now: from single family residents, just plain ole dirt, apartments, resort property and other real estate investments.

When I look at the results of my equity market investments over the years, I have done far better with my real estate investments and I take a conservative approach.

Think about it, but get some help from someone who knows what they are doing. Never speculate, invest.

Ultra LT
UltraLT is offline  
post #5 of 14 Old Sep 10th, 2007, 7:23 pm
Lifetime Supporter
 
zippy_gg's Avatar
 
Join Date: Jun 2004
Location: Kennesaw, GA, USA
Posts: 8,136
Talking

Quote:
Originally Posted by UltraLT
Are you looking forward to the inevitable crash of the market if the Democrats win the White House?
Hmmmm... I thought we were inevitably going that way because the Republicans have been in power for nearly 8 years...

Gilles & Kathy
BMWMOA# 154719
IBA# 71594
2011 Ostra Gray RT
06 Mercedes-Benz E350 Estate (parts and people hauler)
2012 BMW X3 (parts and people hauler)
86 Porsche 911 Cabriolet (my "new" baby)



For her I climbed the highest mountain!
For her I swam across the deepest ocean!
For her I walked through the largest desert!
And then she left me... She said I was never home!!!


To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.
zippy_gg is offline  
post #6 of 14 Old Sep 10th, 2007, 8:03 pm
Senior Member
 
wcarter's Avatar
 
Join Date: Apr 2002
Location: Mauldin, SC, USA
Posts: 589
Three years ago my wife and I attended the Dave Ramsey Financial Peace University class through our church. My wife has led a class each Summer since then. In fact, her 2007 Summer class wraps up tomorrow evening. I am not an investment expert, but I'll pass along Dave Ramsey's recommendation. There are other views, I'm sure, but I've generally found Dave's advice to be sound. With the disclaimers out of the way...

First, focus on paying off all debt, with the exception of your first mortgage. Your mortgage payment should not exceed 25% of your take-home pay.

Then build up an emergency fund equal to three to six months of expenses. Why do this before beginning retirement savings? If all of your savings is in retirement accounts, when an emergency hits (serious illness, job layoff, final drive failure on your LT), you will raid your retirement account. Bad, bad idea caused by a lack of planning.

Now you are ready to begin retirement savings, your goal is to put fifteen percent of your income into retirement. Dave recommends choosing retirement vehicles in this order:

If your employer offers a match, contribute to the 401(k) up to the amount matched.

If your employer does not match, or once your contribution exceeds the match, move to a Roth IRA (yes, it's after tax dollars but the growth is tax free). Contribute to the Roth until you max it out.

If you have not finished your fifteen percent, return to the 401(k) until you are done.

If you want more information go to www.daveramsey.com.
wcarter is offline  
post #7 of 14 Old Sep 10th, 2007, 8:17 pm
Senior Member
 
2002redrider's Avatar
 
Join Date: Apr 2006
Location: Aurora, CO, USA
Posts: 124
Retirement Investing

There is little correlation between which party is in the White House and the performance of the stock market. Also the stock market historically goes up 75-80% of the time. Look at any long term chart, say for the last 100 years. If you do some research you will see that the equity markets have returned around 10% all in over that time period. People's emotions are their worst enemy. When the tech bubble was all the rage in the late 90's that is what everyone wanted whether they understood what the company did or not. In 2002 stocks were very cheap but most people wouldn't touch them. A great 5 year run ensued.

Forget "the stock market". You should own good companies that represent businesses that you would own in total if you could.
Mike

Redrider
2000 K1200LT
2003 K1200RS


To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.
2002redrider is offline  
post #8 of 14 Old Sep 10th, 2007, 8:32 pm
Senior Member
 
midwilshire's Avatar
 
Join Date: Feb 2006
Location: , ,
Posts: 364
Quote:
Originally Posted by UltraLT
Never speculate, invest.
I respectfully dissent. I think a certain percentage of one's disposable investment cash should be spent on speculation. I've had better returns in speculation than swing trading or long term trading. For speculation, I go heavy leverage with options and shorts. When investing, I get in the underlying securities and spiders.

One might begin by reading a little on the topic. Education of a Speculator is a good start. A quick preface might be Reminiscences of a Stock Operator. From there, you can blaze your own path.

As an aside, I do not think the time is yet ripe for real estate speculation. Give it a few years for the ARMs to reset and the foreclosures to really start pumping in. For now, it seems that the Ramsey approach above is the way to go, with a 401K focus on the energy sector. Whatever you do, avoid mutual funds like the plague they are.
midwilshire is offline  
post #9 of 14 Old Sep 10th, 2007, 9:35 pm
Lifetime Supporter
 
bowlesj's Avatar
 
Join Date: Jun 2005
Location: Glen Alpine, NC, USA
Posts: 1,431
Quote:
Originally Posted by wcarter
... final drive failure on your LT), you will raid your retirement account. Bad, bad idea caused by a lack of planning.
Thanks for throwing that in there - had a good chuckle -


BTW - how's the panties working out fer ya?

John

2004 - LT - Anthracite
bowlesj is offline  
post #10 of 14 Old Sep 10th, 2007, 9:53 pm Thread Starter
Senior Member
 
Gizmo1137's Avatar
 
Join Date: Jul 2007
Location: Phoenix, Arizona, USA
Posts: 635
[QUOTE=wcarter]
If your employer does not match, or once your contribution exceeds the match, move to a Roth IRA (yes, it's after tax dollars but the growth is tax free). Contribute to the Roth until you max it out.

I know of Dave Ramsey and indeed some of his advice is sound and I have thought of this option, but have thus far held off, because it seems to me that investing in the Roth IRA after making at least the employer match, is better suited for someone who believes that upon retirement they will be in the same or higher tax bracket. Many retirees are in a lower bracket. So it would seem to me that if in fact you expect to be in a lower tax bracket, that it would be more effective to take advantage of the tax advantages now while working. I guess this is where a good financial planner would help as some have suggested here.

Regards & Ride Safe!

Bruce
'09 Black LT
4-Wheels moves the body, 2-wheels moves the soul.
IBA # 8547
Gizmo1137 is offline  
post #11 of 14 Old Sep 11th, 2007, 12:27 am
Senior Member
 
midwilshire's Avatar
 
Join Date: Feb 2006
Location: , ,
Posts: 364
Exclamation

Quote:
Originally Posted by Gizmo1137
I guess this is where a good financial planner would help as some have suggested here.
Approach "financial planners" with a healthy dose of skepticism. Most of them, like most bank employees, brokers, realtors, etc., are taking a commission on the products they sell you. Those who aren't are subject to other carrots and sticks at the office. What appears to be unbiased advice is a custom-tailored sales pitch.

It's much better to go with a CPA, whose only product is his time. Barriers to entry in the CPA field weed out a lot of parrots who don't think independently. In my experience, they're more professional and have a better grasp of finance, too.

JMTCW
midwilshire is offline  
post #12 of 14 Old Sep 11th, 2007, 4:37 am
 
Join Date: Oct 2005
Posts: 469
Dave Ramsay and his ilk are doing very well thank you out of getting people to pay to listen to them! His basic advice is sound, but after that every retirement investment decision is too personal to be able to generalise. As for financial planners, the only times my investments have bombed was when I listened to their advice instead of following my own gut. I'm still sitting on stocks from 8 years ago showing a healthy loss - and I don't need the tax break because I'm carrying forward a huge loss from another of their recommendations...

There are a few general concepts that most people should follow:
* If there's a tax advantage, use it
* Go for high risk investments when you're young as the potential returns over the long haul can be huge
* As you get older, move the high risk stocks into more solid blue-chips
* Ignore the ups and downs of the market. It'll only stress you out!

If you're playing the market that's a different kettle of fish altogether. As they say, horses for courses....
brianbeemer is offline  
post #13 of 14 Old Sep 11th, 2007, 10:13 am Thread Starter
Senior Member
 
Gizmo1137's Avatar
 
Join Date: Jul 2007
Location: Phoenix, Arizona, USA
Posts: 635
Quote:
Originally Posted by midwilshire
Approach "financial planners" with a healthy dose of skepticism. Most of them, like most bank employees, brokers, realtors, etc., are taking a commission on the products they sell you. Those who aren't are subject to other carrots and sticks at the office. What appears to be unbiased advice is a custom-tailored sales pitch.

It's much better to go with a CPA, whose only product is his time. Barriers to entry in the CPA field weed out a lot of parrots who don't think independently. In my experience, they're more professional and have a better grasp of finance, too.

JMTCW
I would agree that a financial planner or CPA who charges a straight fee or by the hour for their service would be the best choice as they would not have a vested interest in a particular investment. So many financial planners do not charge for their advice but get commissions on the investments they sell. In most cases that is a bad deal.

Regards & Ride Safe!

Bruce
'09 Black LT
4-Wheels moves the body, 2-wheels moves the soul.
IBA # 8547
Gizmo1137 is offline  
post #14 of 14 Old Sep 11th, 2007, 10:17 am Thread Starter
Senior Member
 
Gizmo1137's Avatar
 
Join Date: Jul 2007
Location: Phoenix, Arizona, USA
Posts: 635
[QUOTE=brianbeemer]Dave Ramsay and his ilk are doing very well thank you out of getting people to pay to listen to them! His basic advice is sound, but after that every retirement investment decision is too personal to be able to generalise. As for financial planners, the only times my investments have bombed was when I listened to their advice instead of following my own gut. I'm still sitting on stocks from 8 years ago showing a healthy loss - and I don't need the tax break because I'm carrying forward a huge loss from another of their recommendations...

I would agree and most of the more responsible financial pundits, such as Dave Ramsey do suggest hiring a good financial planner to address issues and concerns specific to your situation

There are a few general concepts that most people should follow:
* If there's a tax advantage, use it
* Go for high risk investments when you're young as the potential returns over the long haul can be huge
* As you get older, move the high risk stocks into more solid blue-chips
* Ignore the ups and downs of the market. It'll only stress you out!

Makes sense.

Regards & Ride Safe!

Bruce
'09 Black LT
4-Wheels moves the body, 2-wheels moves the soul.
IBA # 8547
Gizmo1137 is offline  
Reply

Quick Reply
Message:
Options

Register Now



In order to be able to post messages on the BMW Luxury Touring Community forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.

User Name:
Password
Please enter a password for your user account. Note that passwords are case-sensitive.

Password:


Confirm Password:
Email Address
Please enter a valid email address for yourself.

Email Address:
OR

Log-in











Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page
Display Modes
Linear Mode Linear Mode



Similar Threads
Thread Thread Starter Forum Replies Last Post
03 LT - Your Thoughts dsrthnd K1200LT 27 Sep 1st, 2007 11:55 am
Any thoughts on 08 GT model changes? lhendrick K1200/1300GT (The Next Generation) 0 Jul 19th, 2007 10:46 am
Your thoughts tdraper Bike Talk 9 Apr 20th, 2007 6:53 am
Goldwing thoughts? Seeking advice... danbrew Chit Chat 7 Mar 13th, 2007 8:54 am
Random Thoughts tlash Northern California 9 Oct 25th, 2006 6:49 pm

Posting Rules  
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On

 
For the best viewing experience please update your browser to Google Chrome