401k and investments

Keep in mind, my scenario is a SHTF scenario (not zombies, but economical collapse).

I look at PM as a hedge against hyper inflation, in which the value of the dollar may even crash, and the bank balance you have "might" disappear. Even if you have savings in a 401(k) (which I do too), if the value of the dollar is worthless, the value of your 401(k) is worthless.

In this event, the banks, world leaders, and IMF will need to bring to the table a new monetary system. At that time, is when PM will have value. They didn't crash like the dollar, and can be sold to buy into the new monetary system.

I do not think investing 100% into anything is a good idea, but say a 10-20% investment in PM and another 10-20% hold of physical cash will protect against the shady world economics that we are going through, and trust me, THINGS ARE GOING TO GET WORSE BEFORE THEY GET BETTER.

 

I have made some money on reits. Not holding any now however.

 

buy low - sell high. never panic and transfer shares from a fund just because priced has dropped due to overall market conditions. in fact at your age you will benefit more when the market is low because you are buying and not selling. and dont worry about the sky falling....

8% is good. i would recommend only contributing to the company's match level which should be around 6% and go to a local broker / bank and start another IRA for any additional savings. i would opt for the traditional "no tax" 401k because you are making more now than you will be when you retire which will be $0.



i would recommend not paying for someone to manage your company offered 401k. thats a rip off in a canned 401k. most 401k plans have a web site that offer a free wizard that will recommend the ideal mix of which will be heavy % in stocks because of your age. However for the independent IRA, i would consult with a broker / bank. keep in mind that there is 0% guarantee in any of the options even the money market "low" risk options. There is just different levels of risk based on history.

keep your money out of single stocks or least limit the amount - like the company you work for. my company would give bonuses in their stocks but i have the option to transfer it to a different fund.

usually the funds available for you to select in your company's 401k will give you financial history / description including the risk level.

look for the stock fund that mimics the s&p 500. if the top 500 companies in the US go belly up everything will be bad except for the gold buried in your back yard..

 

Thats one way to look at it. I personally think when SHTF that tradesmen such as Pete will be the new 1%. I believe we will be led towards a barter system.

I appreciate the differing point of view and the conversation tho

 

Yea I do agree that having skills will be the #1 thing to have over money, PM, 401(k).

 

Also if you want a little risk look into tax lien certificates. They take a lot of work but can give you great returns

 

You can set up an IRA where you essentially have a checkbook. This way you are not limited to just purchasing whatever your investment firm offers.

You need to set up a corporation to hold your IRA and you become both the administrator and trustee. There are firms that will set these up for you. You can then invest in anything, a business, properties, commodities, make loans and many more. If you buy properties you are not allowed to use them yourself.

All you need is a down payment. You can also partner with other peoples IRAs to purchase property outright.

 

That too! I got a $10000 piece of property for around $1000 from a tax deed sale.

 

I have much research to do. Thanks for your help

 

Check out a guy named Mark Kohler. He's an author, lawyer and CPA. I have taken several classes with him and he actually makes it interesting.

Here is a link for a company that does the true self directed iras

https://americanpension.com/pages/home

 

You think politicians would vote this stuff in without a way in for themselves?

Start your roth IRA today!
http://www.bogleheads.org/wiki/Backdoor_Roth_IRA

 

If you roll money from a traditional IRA to a Roth, you have to pay the tax on it (no penalty, because it's still a IRA). If your going to do a Roth take money out of your check (after tax) straight into your Roth.
IRS caps that contribution at $5500/yr.

 

We're not in a deflationary period right now. I hate to throw my propeller hat here, but here's the Fed's statement. Look at the third chart down on the 2nd page. The PCE (Personal Consumtion Expenditure) inflation chart is approaching 2%.

http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20140917.pdf

Not exactly, for gold you are supposed to pay a capital gains tax on any gains that you make during your holding period.

"Investment Property

Investment property is a capital asset. Any gain or loss from its sale or trade is generally a capital gain or loss.

Gold, silver, stamps, coins, gems, etc. These are capital assets except when they are held for sale by a dealer. Any gain or loss you have from their sale or trade generally is a capital gain or loss."

http://www.irs.gov/publications/p17/ch14.html

Of course, you could always sweep the gains that you make from gold under the rug and the IRS (probably) would be none the wiser, but that's not something I'd be willing to risk.


Not trying to be a dick, there's just a lot of information out there, and didn't want anyone wandering down the wrong path...

 

Yes, trying to find a way to invest pre-tax without being penalized based on a number.

 

I agree/disagree with your plan on this.

I agree because you are correct about paying less taxes now, compared to later.
However, I disagree to an extent, and I'll explain why.

Say you make $50,000 per year.
If you put 10% into a Standard 401k (before tax), you will contribute $5,000 per year.
Now, if you do a roth 401k, you make $50,000. Taxes eat roughly 28% ($14000). ($50,000-$14000=$36000)now your 10% contribution this year is $3600.
Now, for simple reasons, you don't increase your contribution and you don't have a pay raise for the next 35 years.
$5000-$3600=$1400. $1400 is the amount that you have paid in taxes every year for 35 years. By doing this roth method of your 401k, you are losing that ability of making interest on an additional $49,000. ($1400x35 years).

As for a 401k plan, I don't see the use in using the Roth benefit. Also, you can lower your tax bracket, and you can increase the amount you are contributing without affecting your bring home pay as much.

For the tax benefit I use a Roth IRA.

 

always look at the fees that are charged by each fund, these can rack up big time over the length that you hold the account. For this reason i did some research and found that Index funds are the way to go. Index funds aren't actively managed and hence the lower fees, meaning they are looked at evrey so often by computers and the stocks within them aren't traded daily like what happens on an actively managed funds. That was an EXTREMELY simplified and dumbed down version of it, but research index funds and mutual funds, and compare the fees charged to each in the portfolio that your company provides you.

Way to go on starting the retirement fund!!

 

If your IRA is through Vanguard; the one place I recommend.

Here are instructions to convert from traditional to roth, and back and forth.
https://investor.vanguard.com/ira/roth-conversion

no cliff notes provided.

Cheers