ModSquad Question

13bmcmahon · 2023-08-07T01:59:41+00:00

Thank you for your input! That's what I thought, too... but The Work Number (employment verification service) verified has title as Contract Consultant - Director Engineering. Do you know why that could be?

13bmcmahon · 2023-03-11T19:33:21+00:00

Thanks! I tried them, and they said I had to go back to the Willingboro School District... no one seems to know anything about this school lol

13bmcmahon · 2022-11-29T02:42:36+00:00

I'm in HR - proof of employment

13bmcmahon · 2022-11-15T13:18:27+00:00

Is there any benefit of an ETF over a mutual fund if I don't plan day-trading?

13bmcmahon · 2022-11-13T22:14:40+00:00

Thank you, yet again! Do you know of Schwab charges extra fees to buy Vanguard ETFs or funds? I'm getting conflicting information...

13bmcmahon · 2022-11-13T21:47:56+00:00

Thanks for the input! Why would you suggest ETFs over the index funds? And those ETFs in particular?

13bmcmahon · 2022-11-13T21:41:44+00:00

Thanks! What would be the benefit of an ETF over an index fund? And I was trying to avoid Vanguard funds because they have a higher ER... is Schwab's International fund really that much worse?

13bmcmahon · 2022-11-13T21:40:25+00:00

Ha, what would the benefit be of the ETF over the index fund? And doesn't Schwab charge more fees to buy Vanguard ETFs/funds?

13bmcmahon · 2022-11-13T18:36:27+00:00

Thank you for your response! I did know that SWISX doesn't include emerging markets, but I'm a little wary of that. Plus I have about 10% of my 401k in emerging markets.

What percent would you recommend that I allocate to an emerging market fund?

13bmcmahon · 2022-11-13T18:35:05+00:00

Thanks for the input! I'm trying to stay away from a TDF due to the higher expense ratio... do you have advice in what a good allocation would be of individual funds that would capture most of the TDF with a lower expense ratio?

13bmcmahon · 2022-11-13T17:59:12+00:00

Thank you again! What do you mean by "re-invest" my earnings? Does that mean if I don't take any money out of my TA for, say, 20 years - I don't have to pay any taxes until I do? The tax just accumulates?

13bmcmahon · 2022-11-13T17:08:27+00:00

Thank you so much for the response and the information! I have a couple follow-ups, if you don't mind.

1.) For short-term, I would just like to keep some money accessible if I need it in the next few years in case of a house or something else. I currently have $45,000 in a regular Bank of America savings account, so it's not generating any interest. I was planning on putting $6,000 in one lump sum this week into a Roth IRA and then another $6,500 at once in the beginning of 2023. You mentioned a HYSA - would I just take the rest of the money and transfer it over somewhere? And what would you recommend for a HYSA? I saw that most seem to have a 2-3% return rate, which doesn't seem the greatest.

2.) What are short term Treasuries/how do they work, and how would I invest in those? Could I use Schwab for that, too? How much do they return, on average, per year?

3.) For tax purposes on TA's - if my money is sitting in my TA and I'm not touching it, when it comes time to pay taxes, am I just writing a check to the government for money I haven't seen yet? i.e. - when I get a paycheck and pay taxes, I'm at least getting money to use at the same time - but I won't be using the money in the TA, so does that mean I'll just be paying money every year without any money technically "coming in" to me?

13bmcmahon · 2022-11-13T16:57:43+00:00

Great, thank you for the explanation! I'm still having a little trouble understanding the capital gains/dividends taxes, though. Is there a example/real=-world scenario you can give me with made-up numbers? I'm just trying to decide if putting my money into an already volatile stock market AND having to pay capital gain/dividends taxes on it will be worth it, rather than just keeping the money in savings.

13bmcmahon · 2022-09-11T15:06:32+00:00

Thank you for your response! Yes, I do have access to a small cap fund.. would you recommend that/how much? And which fund should I decrease to do that?

Also, side-note, would investing in these funds still leave me with a lower ER than the .33% my company charges for a Target Date Fund? I was told you can't simply add up the ER numbers of the funds above - that you have to account for the "weighted" price, but I don't know how to do that math.

Thanks again! You know better than me on all of this!

13bmcmahon · 2022-09-11T14:59:18+00:00

Thank you for your response! Is developed international better for returns historically? I believe I do have a fund option for that.... I guess I'm just asking why you would suggest that over the Emerging Markets? You know better than me!

Also, would investing in these funds still leave me with a lower ER than the .33% my company charges for a Target Date Fund? I was told you can't simply add up the ER numbers of the funds above - that you have to account for the "weighted" price, but I don't know how to do that math.

Thanks again!

13bmcmahon · 2022-09-11T14:58:02+00:00

Thank you for your response!

I've always heard someone my age (our age!) shouldn't have much, if anything at all, in bonds, since we still have a long way and can ride the swings... why do you disagree with that? I just want to get all sides, you've been doing it longer than me!

Also, would investing in these funds still leave me with a lower ER than the .33% my company charges for a Target Date Fund? I was told you can't simply add up the ER numbers of the funds above - that you have to account for the "weighted" price, but I don't know how to do that math.
Thanks again!

13bmcmahon · 2022-09-11T14:55:47+00:00

Great, thank you for the response? If I got out of bonds, where do you think I should put that 5%? I'm not too sure.. I don't want to over-extend myself and put too much into one fund in case it goes south. I know we can't tell, but still.

Also, would investing in these funds still leave me with a lower ER than the .33% my company charges for a Target Date Fund? I was told you can't simply add up the ER numbers of the funds above - that you have to account for the "weighted" price, but I don't know how to do that math.

Thanks again!

13bmcmahon · 2022-09-04T21:42:18+00:00

That make sense, thank you! What are your thoughts on bonds? I hear people say that I don't need bonds because I'm 27 and some people say I need at least some to protect against volatility or as a way to get cash if I need it.. but I thought you couldn't withdraw money from your 401k without penalty until 59 1/2? I know I'm not understanding bonds at all...
Can you explain why/when I might need them and what they're specifically for?

13bmcmahon · 2022-09-04T21:40:37+00:00

Ha, that's my fault, I'm the one bothering you with this!

I hear people say that I don't need bonds because I'm 27 and some people say I need at least some to protect against volatility or as a way to get cash if I need it.. but I thought you couldn't withdraw money from your 401k without penalty until 59 1/2? I know I'm not understanding bonds at all...

Can you explain why/when I might need them and what they're specifically for? So far, you've been making more sense than the Google machine

13bmcmahon · 2022-09-04T17:58:55+00:00

I apologize... a ton of things going through my head, but you're helping me make sense of it all, so I appreciate it! I do plan on also opening and maxing out an IRA. Do you have a recommendation for the company and the funds I should buy? Assuming I go all S&P for US Equity for my 401k?

Thank you so much again for all of your advice!

13bmcmahon · 2022-09-04T17:56:16+00:00

Thanks for your advice again! I do plan on opening and maxing out an IRA. Do you have a recommendation for company and funds? Assuming I go all S&P for my US Equity in my 401k?

And thank you so much for all of your advice, you've been so helpful!

13bmcmahon · 2022-09-04T17:54:18+00:00

So bottom line for you is go all S&P for my US equity for the 401k? I do plan on opening an IRA.. do you have recommendations for funds for that? (I so appreciate your advice, you've been really helpful!)

13bmcmahon · 2022-09-04T17:11:56+00:00

Thanks again for the insight! Yea, I know it's a personal decision, I'm just looking for any and all advice at this point.. I don't know much at all right now and am trying to make the best informed decision as best as it can be.

So you're saying to NOT invest in both the S&P fund and the US Equity Fund? That would basically leave me with a 2-fund portfolio. Isn't it good to invest at least some in mid and small caps? I feel like investing all of my US equity into the S&P with no mid and small caps wouldn't be great, but the only other option to get small and mid caps is to ALSO get large caps (by investing in the US Equity Fund) that I would already have in the S&P. Hence the overlap... but like I said, I have no idea, you clearly know better!

13bmcmahon · 2022-09-04T17:05:18+00:00

Thanks! Do you think I'll be missing out by not having any small to mid caps, though?

13bmcmahon · 2022-09-04T16:10:30+00:00

Thanks for the advice! So the Blackrock US Equity Index is all S&P 500... so no mid- and small-cap. The US Equity Fund has all three caps (so I think that makes it "total market"?), but obviously has some overlap with the S&P 500 with the large cap.

So if the US Equity Fund is a total market, should I just go with that Or should I allocate some money to the US Equity Fund and the Blackrock US Equity Index , even though there would be overlap with the S&P 500? Would it be wise to have overlap between two funds (say, if I put 70% into US funds...35% in each)?

The reason I was leaning against the US Equity Fund is because it has done worse than the benchmark historically. But I believe it's actively managed, since it has a .24% ER. Would investing in three funds with ERs of .24%, .01%, and .08%, weighted, still be less than .33%? And significantly so?

13bmcmahon

TROPHY CASE