Put all your eggs in one basket with investing?

[99Saturn]

Yeah I’m putting 7% into retirement.

You'll thank yourself later if you can bump that up. Figure out how to get it to 20%!

 

[supton]

Yeah I’m putting 7% into retirement.

Nice. I’d ramp it up from there to at least 10%, but 7 is a good start.

Have you reviewed what that 7% is going into? That’s worthy of its own thread, to see what you have for options. I may be wrong, your plan may not be “great” and thus investing more into the options provided may not be wise. If so, finding another brokerage may be good.

 

[ecotourist]

"After Bill Gates became friends with Warren Buffett, he began to diversify his portfolio and sold Microsoft shares. Bill Gates' fortune today is 138 billion dollars, if he hadn't diversified it would be 1.33 trillion dollars. Be careful with diversification and with friends who recommend it"

I'd go for a safer 138 $Billion rather than the chance at 1.33 $Trillion myself.

I'd take $1,000 as a sure thing rather than a chance at $10,000 too. Different folks I guess.

 

[AutoMechanic]

Nice. I’d ramp it up from there to at least 10%, but 7 is a good start.

Have you reviewed what that 7% is going into? That’s worthy of its own thread, to see what you have for options. I may be wrong, your plan may not be “great” and thus investing more into the options provided may not be wise. If so, finding another brokerage may be good.

It’s just a regular 401K plan as far as I know. Not a Roth or anything.

 

[ecotourist]

Be boring. Start by taking the investment money off the top and living on the rest. "Pay yourself first."

 

[supton]

It’s just a regular 401K plan as far as I know. Not a Roth or anything.

There’s more to it than that. What fund is the money going into? a target or something else? You may want to review that, if it has a high expense ratio, well that eats into growth. If it’s a low risk fund, well it might not grow fast. At the very least you’ll want to decide if it’s something you want to ramp up your contribution rate into, or if it’s something that you’ll want to roll over if/when you change jobs, and would rather not put anything extra into, above and beyond company match.

 

[ecotourist]

It’s just a regular 401K plan as far as I know. Not a Roth or anything.

What you invest in matters a lot. My suggestion is to invest in one or more broad based and low cost ETFs. As an American you might consider investing in something like the S&P 500.

For me that's would be too concentrated. I have about 30% of my investments in US equities, but a lot in Canada, Europe and the Far East too. And I have about 25% in cash, bond funds and bond ETFs too.

 

[k1xv]

Putting all your money in one investment, hoping it will quadruple is not investing. its gambling.

I suppose you could also skip homeowners insurance. After all, if your house doesn't burn down, the premium is money down the drain.

 

[Owen Lucas]

I'd go for a safer 138 $Billion rather than the chance at 1.33 $Trillion myself.

I'd take $1,000 as a sure thing rather than a chance at $10,000 too. Different folks I guess.

Yeah I'm not supporting staying in one or a few investments, just to how WB can be wrong, and how it affected BG. I'm looking at his situation from a Macro Level though.

I am personally diversified pretty well, a few individual plays as well but within a safe margin.

 

[Dave Hess]

I need to start following the stock market more closely. It would be nice to invest and get some money. I want to invest in Apple stock and my dad said I was an idiot for that because too many people buy it lol.

With your tax return this year open a Roth IRA and get started.

You won’t regret it 35 years from now.

 

[Dave Hess]

Putting all your money in one investment, hoping it will quadruple is not investing. its gambling.

I suppose you could also skip homeowners insurance. After all, if your house doesn't burn down, the premium is money down the drain.

At one time, 100% my Roth IRA was Amazon. I’m not kidding.

I don’t have homeowners insurance on my house here in Florida….. let it burn down.

 

[atikovi]

I'm not greedy so have no interest in stocks or the market. Federally insured bank accounts are where I store my money plus some real estate. Not particularly glamorous or exciting, but the roughly $2500 a month interest I'm getting just for letting some banks store it, is amazing. Whodathunk, banks paying you for holding your money? Used to be they just held it for safe keeping.

 

[AutoMechanic]

With your tax return this year open a Roth IRA and get started.

You won’t regret it 35 years from now.

I owed this year unfortunately haha. $1 lol. I was expecting a refund but it didn’t happen.

 

[Dave Hess]

With inflation, a million bucks just is not what it used to be...

My one personal feelings are that if one wants to leave a legacy and be ABSOLUTLEY SURE one will not run out of money, and keep pace with inflation, one can withdraw 3% of one's portfolio each year (see sequence of return risk)...

If you do not care about leaving a legacy, but do not want to outlive your money, one can take 5%...

One million dollars then generates between $30,000 and $50,000 per year... not bad especially when combined with SS (if it still exists), but not the retirement life of luxury most people look forward to...

Do not get me wrong, a million dollars is a LOT of money, and more than most people will ever have, but it is not the magical number it used to be in the 80's and 90's... if one can have other income streams like rental real estate, that helps as well, but who really wants to be a landlord in their golden years?

https://www.forbes.com/sites/johnjennings/2022/03/30/the-paradox-of-1-million/?sh=705c40245777

$1M in 2024 is really not a lot of money due to all the inflation.

Do you pay taxes on that $1M ?
Capital gains taxes ?
Divided taxes ?

Puppets on TV keep parroting soft landing and transitory narrative.

 

[Donald]

All depends. Once you retire, some portion of the money ought to be put into lower risk (and thus lower growth), that way if the market has a downturn and then stays stubbornly down, you don’t wind up with “buying high and selling low”. The more you have, the more you can leave in aggressive growth, the less you have, the more you need to safeguard.

Usually the advice is about 4% withdraw rate in retirement, but I’m not sure what diversification that is, what percentage of stocks to bonds, or aggressive vs non-aggressive growth stocks. Usually people like to think they will get 40% of their income from SS, but in reality, it’s up to 40% and above a certain income level, SS bend points are hit—and of course, there’s all sorts of doom and gloom about SS benefits going down in the future. That aside, that’s where the usual advice for 10 years income in retirement savings comes from: 10 years income, times 4%, is 40% of that income, plus 40% from SS, makes up 80% of your preretirement income, which somehow is ok in retirement, as somehow the pundits believe retirees don’t do as much in retirement. [If that doesn’t sound like what you’d want, you can start to think about how much you want to save so as to afford the retirement that you want.]

The 4% rule is for when you fund your retirement from savings. For me that's not the case. Defined pension and SSA fund our retirement.

 

[supton]

The 4% rule is for when you fund your retirement from savings. For me that's not the case. Defined pension and SSA fund our retirement.

Sure, but if you had a retirement fund, I would think the 4% rule would still apply, unless if the goal was to draw it down to zero inside of some short time frame. My understanding is that the 4% rule is from multiple simulations (and real world results) of withdrawal from a fund, regardless of the total amount of money one may be getting retirement.

 

[supton]

$1M in 2024 is really not a lot of money due to all the inflation.

Do you pay taxes on that $1M ?
Capital gains taxes ?
Divided taxes ?

Depends on where that mil is, right? 401k, withdrawals are ordinary income. Outside of 401k or Roth, likely long term capital gains. Roth? free money baby.

I owed this year unfortunately haha. $1 lol. I was expecting a refund but it didn’t happen.

I hear ya. If you are off on that, now might be a good time to start a budget and then to track it. I have a spreadsheet where I can put in my salary at the top, then any other income, and it computes what my expected tax load will be. Precision it's not, as tax law is wonky (got hit by short and long term capital gains this year, no idea how my wife is figuring it out). But it's more than good enough to know if I get a refund or not--and my goal is no refund (no free loans to Uncle Sam, he doesn't pay interest).

For a few years I was funding my Roth out of bonus money but this year I finally started putting in the Roth sooner. On the basis of, I can look at the year and "know" that I can afford to put it in, regardless of getting a bonus. Bit risky but I'm ok with that.

 

[John105]

The problem is people my age have never seen stocks go down. I’m talking 1994-2024. There have been pullbacks, but eventually, historical highs again, like now. There is no way to know this will continue. That’s where diversification comes in. Worst thing that could happen by diversifying is one misses money. That’s better than losing money. Examples…I sold Amazon in 2001 after it tripled for me. I missed out on a lot. But I didn’t lose. I got Facebook at the IPO and rode it down and kept buying to 19.xx, and bailed at 43. I missed out on a ton. But I didn’t lose. Truth is who really knows, so we need some strategy. It’s not always easy.

 

[tbm5690]

I'm 33 and 100% index funds...I have time to lose which makes a difference. As I grow closer to needing the money I of course will go more conservative.

 

[Rogueman2016s]

it’s not a good time for investing right now the markets very unpredictable and unstable. Preserving capital is key right now. Just an example if you lost 25,000 how long would it take you to replace it? be conservative let’s say 2-3% on that 25,000 multiple that by how long your losses are. If you have time to play and ride the market get a target date mutual fund or etf. ETF will trade like a stock and will normally have a lower expense ratio.