HI all my name is aka El Jefe. am in my 30 with the desire to fix the shtt i made in my finance and hope that i could retire comfort ly
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Welcome - Start Here & Introduce Yourself
Hello my name is Josiah and I am glad to be a part of this group. I have been watching the youtube channel for some time and now I am looking to start implementing the things I've learned into m life
Real Estate Investing
Hi,
I just heard about the unrealized capital gains tax proposal put forth by Senator Wyden. The articles keep talking about how it is going to make rich people pay on long-term investments. What does that mean for the middle class? Wondering what your thoughts are.
Thanks,
Chasity
Itâs not that heâs being mean or anything but as an immigrant he doesnât necessarily understand the consequences of certain decisions. To him itâs perfectly reasonable for him to think when he is gone his wife would be able to continue their household as is and not have the govt take away their home. That is the problem with these things. Exactly as you said, you know how to maneuver around such impacts but the average lower income person doesnât know how to or if they even do doesnât have... [ more ]
First of all the current cap is $5 million of inheritance. So she could inherit a lot of house and money and not pay anything. The point here is does death wipe the slate? I don't think that's necessarily fair. If you sold it before you die you would have to pay capital gains tax, and so if your descendants sell it, they should pay the tax. And a $1 million dollar exclusion is pretty generous. Bear in mind after that you pay capital gains which is 0% on the first 10k, 15% on the next $500k. [ more ]
I realize there is a desire to âget those rich guysâ but reality is the super wealthy will find another shelter. The scenario described is actually pretty scary for this reason: My mother in law lived with her husband in a San Francisco home they had for nearly 40 years before his passing and him being kind of the traditional guy from his era had the home in his name only. Their only income was social security but that was fine as the house was paid for decades ago. Without the current... [ more ]
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Welcome - Start Here & Introduce Yourself
Hello all! I feel that I am finally near a point in my life where things are pretty comfortable and I am glad to find resources like this community to help inspire me to stay on track and make it the rest of the way there.
Growing up my parents never had much but they had their own business and I think as a result I always had a strong work ethic and never really developed a taste for fancy.
My mindset was that I could advance myself by working really hard (at one point holding 3 jobs) but realized you can only do that so long and in the end there wasnât much to show for it (also had a girlfriend at the time working against me financially).
However there were 2 (maybe 3) things looking back that I did absolutely right:
- As soon as I could I bought a house (I just never liked the idea of renting)
- As soon as I joined my current employer (20 years ago now) I elected to put 15% into the 401k they offered even though they were already offering a pension (which is a mandatory contribution of 7.5% salary and matched 100% - to the pension no match on 401k at the time).
- I never bought a new car, on average spending 3-4k and learned how to fix them myself so I would get many years and 150k+ miles out of each.
It was a struggle through my 20âs and 30âs but now reaching mid-40âs I think I see a light at the end of the tunnel (hopefully not a train lol).
That house I bought in my early 20âs is now a net income rental property and that 401k is on track to when combined with my pension double my current salary at retirement before any social security that may or may not exist.
Presently I am debt free for the last 4 years other than the mortgage, but Iâm still not really saving a whole lot more than our emergency fund and what goes into the 401k. That makes me worry that I should be saving more.
Starting A Business/Side Hustles
It looks like many companies are switching to remote work for good and other industries may not return after the pandemic at all. What I want to know is, will working-from-home become the new standard for businesses, will jobs return after the pandemic is over? Or is the job market in the US changing dramatically right before our eyes? What are your thoughts? ðĪðĪ
I think some will return to as they were but not all. It will vary by the demands of a given profession, individual work habits, and company culture. In my profession we found that not only could we work effectively remotely but our team was actually more efficient so my employer has already told us they plan on cutting back office space and keeping us remote. That leaves me wanting to do more to make my home office a better work environment. However there are no longer any tax breaks I am... [ more ]
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Debt Management
Debt repayment is something no one really wants to think about. But, it's something that a lot of us need to plan for. What's been some of the best strategies that work for you? Especially for someone who has a lot of time, but not a lot of money to get it done?
A power move by @vodster above. Lowering your expenses and using all your excess funds will result in a real quick way to reduce debt super fast. If you want to double down lower your expenses and simultaneously raise your income. You will be so happy you sacrificed for the short term. [ more ]
Get roommates. Move back in with your parents. Do anything short term to cut your costs so you can kill that debt faster. [ more ]
Let's say you have 2 debts: A $2,000 car loan at 6% and an $11,000 credit card debt at 18%. While continuing to maintain minimum monthly payments on both, it makes mathematical sense to use any extra cash and apply this to the credit card debt since it has the higher interest rate. However, psychologically, it has been found to be easier if you apply any extra cash towards paying down the car loan since the balance is lower and you will see it paid off much sooner than the credit card debt. [ more ]
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Real Estate Investing
Wife and I are researching properties for Airbnb in FL, and my wife stumbled on an article that stated if property is purchased you cannot rent it out. Like many subjects there is always more when you dig in further, is this in some areas and not others? How much truth is there to this?
Thanks for reading and engaging.
Real Estate Investing
These days everybody says take advantage of the low-interest rate, but is it really an advantage if I want to pay off my mortgage in 10-15 years? in my situation, I have to take 100-150k more in mortgage to compete in the current housing market...
Also, the home prices have increased almost 20% ... ... low-interest-rate increased buying capacity but in most cases not giving you an option to buy the house you like. So you will be paying a premium for average properties...
Please share your thoughts ...
Taxes
I am facing a tax issue, but let me preface it by saying this is a good problem to have. I have been blessed to see some massive gains in one particular stock I hold in my portfolio. My plan is to use these gains to completely pay off my mortgage (I told you they were massive) which will be liberating on a level that I cannot explain. The small issue (good problem) is that this will lead to a huge tax liability and possibly push me into another tax bracket. I have held the positions longer than a year, so the gains do qualify for long-term capital gains tax. I am open to all ideas offered. Thanks in advance for any suggestions.
If you are going to pay the taxes, you might as well take the profit right away, and put the money to reducing the interest. No sense in waiting for the money to accrue more interest. [ more ]
Thanks for the thorough evaluation with some numbers to support it. You offered a lot of info which I appreciate. I think the interest over the next 30 years compared to the tax liability for this one year makes it clear. I have decided to sell off shares each month to pay off the mortgage by year's end. I am also setting aside a portion of the proceeds for taxes due next year. This will be a huge milestone for me and increase my monthly cash flow in order to start new investments. Thanks... [ more ]
Thanks for the reply. You make several great points. I definitely don't want a fall in the stock price to spoil my plans. I have already seen some correction. I have decided to sell off shares each month for the next several months and retire the mortgage by year's end. I am offsetting my tax liability by increasing contributions to my traditional 401k and 457b plans. I really appreciate the sound advice. I will post back here to let you know how it turns out. [ more ]
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Retirement Planning
I have Life Insurance and a Roth IRA.
My advisor keeps pushing Life Insurance as an investment opportunity. After doing some research this seems to be a terrible idea. I want to 1. confirm I am correct and 2. ask the group's opinion on putting money into my Roth IRA on a monthly consistent basis?
As to putting money into an IRA monthly, if you don't have the money to fund it up front, do that. If you can fund it right away, do it. If you are worried about the market going down, invest it in something else. If you are getting 0.1% in your bank account, or 0.1% in your IRA but not getting taxed, the IRA still wins. But if you look at a REIT, they pay interest and they are at least not corrolated well to the market in general. Make money as early as possible in your IRA if you can... [ more ]
For certain high-net-worth individuals, life insurance is a way to pass on more millions to decendants without paying taxes. But financially insurance as an investment is reliably a good deal for your insurance agent, for you, not. Term life is a bet that you will die. If you "win" your family gets the money so they can survive without you. The other kind of life insurance which amasses value is a poor investment. It is better to buy term life while your family needs your income, and once... [ more ]
The following context really helped me to frame how I view life insurance vs. retirement: Life insurance is way to ensure security for your family in the eventuality of your dying. Retirement savings is a way to ensure security for yourself in the eventuality that you stop working (i.e. your primary income stream stops). Thinking about it in this context, life insurance is obviously not a a great investment vehicle for yourself, but perhaps a great one for your family when you are gone. [ more ]
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Welcome - Start Here & Introduce Yourself
I'm older and just trying to catch up after raising my children singlehandedly for almost 30 years.
Joede, Never give up. There is no question that the best way to get rich is to have a rich parent who can give you a leg up. But if you have the desire, and the will, you can improve your situation. I think Minority Mindset really captures a lot of it. A lot of people overspend, and Jaspreet spends a lot of his effort trying to convince them not to. But it's hard. I personally am an overeater, but eating and spending are similar in the sense that you can't go cold turkey -- you have to eat,... [ more ]
Thank you so much for your help. I was looking at distressed properties in which I would be paying cash. I thought the money I had was enough but I see that there really is no way for poor people to get ahead. I have some stocks but I wanted to give my money an actual chance to grow for my children. A rental would give my children "passive" income and pass on to any potential grandchildren. My rent is 4 figures and is actually inexpensive for where I live. I tried to buy a home years ago... [ more ]
Think before acting. Buying a property has a high frictional cost. You pay taxes to buy, and you pay commisions to realtors to sell unless you manage to sell yourself. Buying in another state is a huge hassle because when something goes wrong you have to pay someone else to deal with it. If you yourself are renting, you could buy a place to live in first. Unless the place you live is far cheaper to rent. If you are just getting started, the stock market is a more fluid way to build capital... [ more ]
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Taxes
Taxes can be a pain. Luckily, there are some creative ways to legally hack your taxes every year. What are some of your favorites?
Also, the FREE tax programs I mentioned in my previous post are always looking to find new volunteers and they provide FREE tax training where you will likely learn a few more hacks to save money on taxes, as per your opening question. Having gained experience completing taxes will look good on a resume too if you are looking to pursue a career in business or finance. Lastly, but equally important, it will also give you a great feeling at having helped others who may not be in as stable a... [ more ]
You can get your taxes done for FREE instead of paying a firm if you are a qualified taxpayer. In Canada, there is the Community Volunteer Income Tax Program (CVITP). Community organizations host free tax clinics where volunteers file tax returns for eligible people. Guidelines in most provinces are for individuals earning up to $35K, a two person family up to $45K, and so on. (see details: https://www.canada.ca/en/reven...ome-tax-program.html ). In the U.S., the IRS's Volunteer Income Tax... [ more ]
@Nathan_Gregory For me it would be: Depreciation from rental properties Tithing/donating at my local church. 401K [ more ]
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Buying A Home
I will be a first-time home buyer and have a 30% downpayment aside. Currently looking for a house but it's difficult as inventory is very very low.
Is there an option to invest this money (short team) and get some return?
Congrats on having put aside your 30% down payment. I understand where you are coming from since you are not having luck at the moment in finding a home and with time trickling by you're now finding yourself often thinking about this money burning a hole in your pocket. The thing is, rates are so low right now you would be lucky to get 0.2% in a high-interest bank account, so it is not really worth the effort to open one up. Resist any temptation whatsoever in putting this money in a stock... [ more ]
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Real Estate Investing
I am older and came into a small amount of money. I would like to buy an investment property so my children can have some wealth.
I currently rent and the location of the potential properties are not in my state. Does that matter as it will not be my primary residence
Should I buy a fixer upper and try to get a loan for the renovations or just buy a house outright with no repairs needed but it costs more?
I know I am leaving out a lot of details but I hope this is enough to direct me on the right path.
Welcome - Start Here & Introduce Yourself
Hello all,
My name is Shawn, I just recently started following Jaspreet and the Minority Mindset. I am new to all of this basically and look forward to learning how to grow my wealth.
Long Game FTW!!
Stock Market Investing
What is recommended for starting kids saving money while investing in the stock market? Since the market gives better returns what platforms are best?
Avoid individual stocks. Consider a low cost growth ETF and ensure dividends are set to automatically be re-invested. The money will snowball bigger over time. Also be aware there are often government programs that can help with saving for a child's post secondary education. In Canada there are two such programs: 1) The Canada Education Savings Grant (CESG) where the federal government will grant funds based upon a percentage (to a lifetime limit of $7200) of what an eligible family puts... [ more ]
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Stock Market Investing
I have a couple of dollars; and would like to invest in Mutual Funds (my RRSPs) and a bit in stocks.
I am very new to investing. How do I go about it.
Thanks sounds like very good advice [ more ]
Invest in low-cost ETFs like Vanguard or others to start. They allow you to invest in a basket of stocks and are generally lower cost than mutual funds. You could have some growth ETFs if you are younger or Balanced ETFs if you are mid-way through your working career. Stay away from investing in individual stocks until you have built up a large balance of investment funds, and even then, I would think twice about doing so. Companies like Xerox, Blockbuster video, Sears, and many more at one... [ more ]
Me too Iâd be interested in your answers [ more ]
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Buying A Home
We're focusing on paying off the mortgage, recent refi at 2.8%/30yrs, pounding $1100 extra to the principal monthly. So the thought came up of would it be possible to place the $1100 somewhere to grow and pay off the mortgage sooner. Just don't think the stocks would offer the security that we want to risk as the vehicle of growth...
Other things to consider, all debt is paid off, and we have 8 yrs till the mortgage is paid off at the current plan.
Thanks
Thanks for the info, Iâll look up some options and do the comparison. I didnât realize that they could have unadvertised options. [ more ]
Take a look at investment firms like Edward Jones, they often have unpublished money market accounts that yield better returns. Deposit that 1100 there and earn interest on it for the next few years, then pull it and pay a lump sum against the mortgage. But do check the numbers - if the interest earned does not exceed the compounded reduced principal, you might already be doing the best thing [ more ]
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Retirement Planning
Hi MM community,
When would you consider it appropriate to (1) hire a financial advisor with a yearly fee of 1% of portfolio assets, versus (2) a Robo Advisor having a 0.4-0.5% yearly fee, versus (3) investing in ETFs on your own using an app that automatically rebalances your ETF portfolio?
Your opinions are welcome.
KL
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Debt Management
So we started getting financially savvy and paid off our truck and Credit card. Now I work in the oilfield and it's become an unsteady place recently. we started saving again but have other debts that we still want to pay off. We have a car loan which is around 39k at 5.71% and a loan of 10k at 0%. with the tax return we were thinking of putting a year worth of payments for the 10k loan in a separate account, and start attacking the car note to hopefully have it paid off by the end of the year if work stays good. What are your thoughts??