OT: Investing - Stocks/Mutual Funds/Bonds/Crypto

[MickeyDavis]

Let's get back to investing. OT thread for other stuff. Thx.

[jschligs]

Making my yearly Roth contribution soon, was curious what people's thoughts were on taking it out of my savings account (which currently has 4 months+ living expenses) or our joint investment account? The only debt we have is our mortgage, and we're thinking of trying for kids soon. We have plenty of room to spare in our investment account too.

[MickeyDavis]

Making my yearly Roth contribution soon, was curious what people's thoughts were on taking it out of my savings account (which currently has 4 months+ living expenses) or our joint investment account? The only debt we have is our mortgage, and we're thinking of trying for kids soon. We have plenty of room to spare in our investment account too.

The nice thing about a Roth is you can tap into your money any time you want. The contributions, not earnings. Earnings can't be withdrawn until you're 59 1/2 and the account has been open at least 5 years. So for example if you put in say $3,000 and it grows to $3500 you can take out the $3000 anytime for any reason without penalties. The other $500 you have to follow the 59.5/5 year rule. So Roth's are fairly liquid for cash on hand. It would take a few days to get your money. Of course your contributions could go down, which won't happen with a savings account. Obviously the whole reason to have a Roth is to let your money grow tax free, not use it for cash flow but it's nice that you can use it if you need to use it.

[REDDzone]

Making my yearly Roth contribution soon, was curious what people's thoughts were on taking it out of my savings account (which currently has 4 months+ living expenses) or our joint investment account? The only debt we have is our mortgage, and we're thinking of trying for kids soon. We have plenty of room to spare in our investment account too.

Are you planning on building your savings back up with the monthly surplus? If so, I say go for it and here's why:

Keeping in mind MD's post, one option is to put it in the roth and just invest it in a money market inside the Roth. That way you are maxing out your Roth for the year, but if an emergency hits, your savings will not have decreased at all and you can pull it out of the Roth without issue.

That said, once your savings is built back up, I would invest the money in the roth obviously. Whether that be lump sum or DCA.

[REDDzone]

One last thing in case anyone didn't do it yet...reminder that you can still max out your 2019 Roths until April 15th or whatever the date is this year. A lot of times they auto characterize any automatic contributions as the current year even if the prior year isn't maxed out, but you can resolve that with a phone call. And if it's a manual contribution, you can define the year it goes towards yourself.

[MickeyDavis]

One quick thing about HSA's. You can only use them for medical expenses from the date you open the HSA. So if you have $1,000 in medical expenses currently you can't open an HSA, put $1,000 in it and then pay off those medical expenses. Any medical expenses going forward you can use HSA money.

[HaroldinGMinor]

One last thing in case anyone didn't do it yet...reminder that you can still max out your 2019 Roths until April 15th or whatever the date is this year. A lot of times they auto characterize any automatic contributions as the current year even if the prior year isn't maxed out, but you can resolve that with a phone call. And if it's a manual contribution, you can define the year it goes towards yourself.

Same with medical expenses from an FSA...depending on the plan. So if you had med expenses from 2019 and still have FSA money left from 2019 you can apply them in some cases.

[Stannis]

2019 was my first year of investing. I usually do my own taxes. But should I consider hiring a pro this time around? Or is it easy enough to do it on your own.

I would prefer to do it myself to save money. And I usually use TurboTax.

I invested in some LPs before I learned that these require a different tax form (K1 form I believe). So I sold them after 3 weeks. But it was enough to receive dividends from them. I'm going to stay away from stocks that use the K1 form for now on.

I received dividends, foreign dividends, and dividends from LPs.

None of my numbers are large at all. Like $15 bucks for ordinary dividends, $12 for qualified dividends, $6 for Section 199A dividends, $16 from LP income.

I only have like 30 bucks for capital losses. Maybe 40 dollars in losses for the LPs I sold.

[jschligs]

2019 was my first year of investing. I usually do my own taxes. But should I consider hiring a pro this time around? Or is it easy enough to do it on your own.

I would prefer to do it myself to save money. And I usually use TurboTax.

I invested in some LPs before I learned that these require a different tax form (K1 form I believe). So I sold them after 3 weeks. But it was enough to receive dividends from them. I'm going to stay away from stocks that use the K1 form for now on.

I received dividends, foreign dividends, and dividends from LPs.

None of my numbers are large at all. Like $15 bucks for ordinary dividends, $12 for qualified dividends, $6 for Section 199A dividends, $16 from LP income.

I only have like 30 bucks for capital losses. Maybe 40 dollars in losses for the LPs I sold.

Honestly if you're not completely money-illiterate you should be fine to do them on your own through TurboTax. You seem fairly well versed and most everything is available via Google or asking here.

[chile]

I believe you can only write off real estate depreciation against your primary income (say you’re an attorney or something) if your spouse is a certified real estate professional. You can’t really have a full time job AND be a legal real estate professional to defray taxes on your non-real-estate primary income.

Yes I think you are correct

I just want to start by saying I am not a CPA or this isn't my full time job (all self taught). So that is why I am sometimes hesitant to give my advice/plan.

I had to check with my accountant. He mentioned it depends on your income level but I don't know that level yet. But depreciation is not lost and transfers to future years.

[BobSwift]

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[midranger]

I believe you can only write off real estate depreciation against your primary income (say you’re an attorney or something) if your spouse is a certified real estate professional. You can’t really have a full time job AND be a legal real estate professional to defray taxes on your non-real-estate primary income.

Yes I think you are correct

I just want to start by saying I am not a CPA or this isn't my full time job (all self taught). So that is why I am sometimes hesitant to give my advice/plan.

I had to check with my accountant. He mentioned it depends on your income level but I don't know that level yet. But depreciation is not lost and transfers to future years.

You can definitely write off depreciation on your real estate income, just not your primary (non-real estate) income unless your spouse is a real estate professional. There are criteria for being a real estate professional, It’s something like you have to demonstrate you’ve worked at least 25 hours a week on real estate and it has to be your primary source of income ( not sure of the exact criteria)

[GiannisAnte34]

if I have a flex HSA account and dont spend the money by the end of the year, can I roll that money over into an investment? i've heard of this before but I don't know how to execute it

[sidney lanier]

Even though I kind of buy and hold and don't obsess about what's in my portfolio, I still get bothered when one of my companies gets bought. Today Morgan Stanley announced it's buying one of my faves, E^Trade, which I've owned since the 2008 crash, and I'll miss it. The 25% or so premium on the current price is nice but doesn't fully compensate for the hope of long-term growth that's always in the back of your mind when you own a stock.

Fun fact on E^Trade. I've used them as a broker since the early 1990s, and in that almost 30 years I've had the same username and password, and they have never required a password refresh. Either they have the world's best security or they just don't give a damn.

[MickeyDavis]

if I have a flex HSA account and dont spend the money by the end of the year, can I roll that money over into an investment? i've heard of this before but I don't know how to execute it

HSA does not have to be used by the end of the year. And you can invest it just like a 401k. Then switch it back to cash if you need it for medical expenses. FSA has to be used each year.

ETA Not all HSA'S have investment options but most do. You can't contribute to both a HSA and FSA. FSA is a good option if you aren't eligible for an HSA and you know you'll be able to use the money. FSA limit is $2750 per year, HSA is $3550

[KidA24]

if I have a flex HSA account and dont spend the money by the end of the year, can I roll that money over into an investment? i've heard of this before but I don't know how to execute it

HSA does not have to be used by the end of the year. And you can invest it just like a 401k. Then switch it back to cash if you need it for medical expenses. FSA has to be used each year.

ETA Not all HSA'S have investment options but most do. You can't contribute to both a HSA and FSA. FSA is a good option if you aren't eligible for an HSA and you know you'll be able to use the money. FSA limit is $2750 per year, HSA is $3550

MD is correct, for how you invest it, that will depend on who is controlling your HSA (ie, what bank your company uses). You definitely want to max your HSA contributions every year and invest what you don't need for medical bills.

HSA's have what they call a triple-tax advantage:

Contributions are tax-deductible, so they reduce your federal income taxes owed - they come out of your paycheck without being taxed. Assets in your HSA account typically grow tax-free, at least at the federal level. Funds can be withdrawn without being taxed by Uncle Sam if you use them for qualified medical expenses

[shokoman]

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[skones]

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best 1st post eva

[DigitalFool]

Time to start trickling some money in the market.

[GBBucks]

These markets are hot, haha. Not advocating for market timing but it’s not surprising to see this correction. And I wouldn’t be surprised to see it continue.


SP500 YoU earnings: +.07%
SPX perf 12/28/2018 - 2/21/2020: + 34.5%
12/28/2018-2/27/2020: +20%

NASDAQ YoY earnings: -5%
CCMP perf 12/28/2018 - 2/21/2020: +45%
12/28/2018 - 2/27/2020: +30%