Is it worth the risk to try to squeeze out an extra 2-5% per year (my guess of Berkshire outperformance)? Maybe not. Once you include the likelihood that I’m just flat out wrong about that outperformance, probably not. But won’t it be cool to have bragging rights if Berkshire moons?
And this is probably a matter for a different thread, because it’s not STONKS, but planning is super complicated for me. I’ve got 3 kids, with the oldest in 9th grade, but I have no idea what their college needs are going to be. (Their educational needs and performance to date have been extremely diverse.) I’ve been aggressively saving since the first one was born, but if they all end up going to relatively cheap schools for 4 years, I’m probably going to have a good chunk of money left over. And I don’t really have much interest in early retirement, because my job is pretty flexible and well suited for living a good life and vacationing without having to retire - it’s not very costly to work for an extra couple of years. So the ambiguity of what I’m actually saving for makes me want to throw up my hands and treat investing like a game of Top Shot.
Yeah, that’s not great either. I’m not exactly a 3 fund portfolio guy, so I’ve got enough small and mid cap funds to dilute the effect of the Apples, Microsofts, etc. Also I think there is some middle ground between 6% and 30%.
Actually, my biggest holding isn’t even BRK. One of the last individual stonks I bought was NVDA. I didn’t buy a lot but enough that through incredible stonking, it has surpassed my BRK. I’m trying to TLH it down, but not enough losses, once again, thanks to stonking. Nice problem to have, I suppose.
For your 401k pretax is better than Roth because if you retire early you can convert your 401k money to Roth money at your marginal tax rate. Which, if you don’t have a job, is pretty low. So if you also have taxable accounts (not Roth, just accounts that you’ve paid taxes on and invested into whatever), you can live off those. You’ll have to pay capital gains, but capital gains are separate from ordinary income. So your 401k to Roth conversion will count as ordinary income. So if you don’t have any income you’ll be able to cram some 401k money into Roth taxed at 0%, some more at 10%, more at 12%, etc. Like tens of thousands of dollars at 0-12% every year you don’t have an income. Roth IRAs are good for young people who don’t make that much money (low current marginal rate) and are worried about not being able to access the money (contributions are always available for withdrawal penalty free). But for higher earners 401k is better because your marginal rate is probably higher than what it will be in retirement. And if it isn’t then who cares, if that’s the case then you’re rich anyway.
Yes, as long as you can roll over the 457 to a traditional ira, which I think you can but I’m not certain. That’s the first step in the 401k conversion scheme I described above, roll the whole thing over to a traditional ira.
They can do a backdoor Roth. But that’s kind of irrelevant to my post, if you make over 125k and have the choice between a roth type contribution and a pre tax contribution you should definitely choose the pre tax. Because your retirement tax rate will probably be lower and there’s a good chance you can convert some of it to a Roth at a low marginal rate down the road.
Fair enough. IDK if I’m dumb or just lazy but all I do with my money is max traditional IRA and 401k and put the rest into random vanguard indexes a few times a year and pay some extra to mortgage. No individual stonks, seems crazy risky.
There was no thesis. I was a fucking donk. A buddy convinced me that it was going to moon, and I had some money lying around, so I took a shot. He actually sold somewhere around 10x, so I have done even better with his advice than he did.
I’m no Warren Buffet but the strat I’m using is max our 401ks, then back door Roth the 6k then anything else goes in a taxable. Seems legit enough but who knows.
Our retirement system is such a joke. You only have $19,500 to pump into a 401k if you’re making really good money. And your social security benefit is less if you make less. And if you have a low wage job your health insurance probably sucks.
Conservatives: people should just save and be responsible.
Normal people: well I make $40k, my rent is $1500 per month, feeding and clothing my kids is $1500 per month and my deductible is $8k. Tell me more about this 401k and HSA thing you speak of.
Just a total joke country in every way imaginable.
Since we’re doing tax advice, when I sell my condo will I owe capital gains? You guys told me know. But my buddy told me yes, but maybe you get some kind of once-in-a-lifetime exemption?
Primary residence gets a tax free gain up to (I think) 250k, but if you’ve been reporting it as a rental property and depreciating it you’re going to have to pay cap gains.
