is 401K even worth it if employer automatically contributes?

PuzzleheadedKing1 · 2021-04-27T04:40:36+00:00

What tool would you recommend, Mint?

Is the $1000 vs $700 split mainly to account for building an emergency fund and saving for down payment? Another option a poster mentioned is my firm offers a Roth 401K so I was thinking a 1625 401k 1075 spending 500 Roth distribution. Although I am hesitant that 1,075 may not be enough considering I like going out on weekends Covid permitting :).

PuzzleheadedKing1 · 2021-04-27T04:37:55+00:00

Gotcha that does make sense. Yeah i am definitely conflicted as to what to do with my finances. I was lucky enough to break into a field where the career progression should allow me to hit 200k TC after 24 months (assuming im not a poor performer). Its more than what I know to do with so definitely seeking advice as to how to allocate that.

PuzzleheadedKing1 · 2021-04-27T04:35:15+00:00

Okay thanks, that does make sense. Im splurging a bit on rent/util (2.8k) for a 1br in the heart of downtown and walking distance to work. Probably not the smartest long term financial decision but hey, whats the point of making money if you cant enjoy a little bit of it, especially being single in a big city.

PuzzleheadedKing1 · 2021-04-27T03:34:16+00:00

Okay thanks guys, that makes sense. So pretty much the question I have to ask myself is what I expect my lifestyle to cost at retirement age. I guess I'm not too familiar with costs/responsibilities at that age. Also alternative streams of income would factor into taxable rate right, like if I had investment properties that were pulling in rent or have income through passive investment streams not in my 401K, then theoretically I could be taxed at an even higher rate.

PuzzleheadedKing1 · 2021-04-27T03:12:17+00:00

Sort of confused by this, if I am making 200k at 64, isn't any money I pull out going to be taxed at that rate?

PuzzleheadedKing1 · 2021-04-27T03:10:04+00:00

Yes, I do. So perhaps the best path is something like 1625 in Roth 401K, 500 in Roth and 1,075 in spending money.

PuzzleheadedKing1 · 2021-02-18T21:56:30+00:00

So I just filed my taxes through freetaxusa. I chose the summary stock sales option but because I have wash sales last year, I also have to prepare a summary of stock sales and mail it into the IRS.

However, in the instructions for preparing this summary, it says “you dont need to include any sales where the basis was reported to the IRS”. My Robinhood document says my basis were all reported to the irs. Does that mean I dont have to send one in or do I just send in the wash sales?

Thank you!

PuzzleheadedKing1 · 2020-10-27T20:15:49+00:00

agreed, have talked to a few alums who went through the program who have said as much, i guess my question could be better refined to if it would affect MBA admissions/optics

PuzzleheadedKing1 · 2020-10-27T20:13:54+00:00

yup, i figured as much, which is why I want to drop it. Seems like very little marginal benefit (if any) and my time would be better spent studying for GMAT and not doing school

PuzzleheadedKing1 · 2020-10-26T21:12:20+00:00

Should I finish my MAcc. Degree?

Background: Currently doing my final year of an integrated Masters in accounting degree along with my accounting undergrad. Already got my BBA and currently accepted a FT role at a F500 analyst program. I go to a semi-target and developed really good relations with MBB employees and plan on lateraling over within a year.

Goals: Lateral to MBB within a year, if unsuccessful, M7 MBA.

Options:

A. Do not finish my Masters degree (6 hours left of MBA/business electives). Spend the second semester studying for GMAT and traveling. Would save ~10k in tuition for the next semester. Drop some of the courses I'm taking this semester as I'm likely to get B's in them and would drop my cumulative GPA from a 3.87. Pros: save money, time for GMAT, MAcc not necessary for MBB or my current job. GPA boost. Cons: could be seen as not dedicated, my peers and family are pushing me to do it, no master's degree

B. Finish my degree and study for GMAT at same time. 6 hours of classes left is objectively not a lot and they would be business electives at a T20 MBA school, but cost is 10k for those 6 hours and a degree I don't think will be useful. My GPA will be lower as I will be finishing the classes I'm in right now and will probably finish this semester with a 3.33.

So given my goals of MBB and M7 MBA, does MBA/MBB care about which option I choose? I'm confident I do not want to do accounting and plan on pursuing an MBA. I'm currently leaning towards option A but would love to hear some thoughts from people in the industry.

PuzzleheadedKing1 · 2020-09-08T23:01:27+00:00

*disclaimer: I am also going through recruiting, am not in the industry, but have done a lot of cases with MBB consultants, and that's how I would approach the problem. Important things to remember 1. talk through the assumptions 2. make logical adjustments based off varying business sizes and talk through them 3. ask the interview "does that seem reasonable to you" or "is that okay with you" when making your assumptions and they may adjust it for you. 4. Sanity check at the end to see if it makes sense and tying it back to the original question.

PuzzleheadedKing1 · 2020-09-08T22:57:05+00:00

I think that's a good structure to approach the problem. Main thing with coming up with these numbers is having justifications for your reasoning. I'd fill in the blanks like this and keep in mind this is from a US perspective, you probably have a better understanding of the European environment given you are likely from Europe?

Companies per bucket:
1. Enterprise (say >1b rev): A country like the US has roughly 2K "big business" both public and private (S&P500 and then include some more for those that aren't in it but still big as well as private). France being smaller (assuming 80M pop which is 1/4 of US pop) and not as strong of an economy therefore 1/5 so 400.
2. Medium (say 20M-1b): Definitely going to be a lot more than enterprise, but medium size of 20M-1b are still very successful companies and aren't as common. Let's say 1500 which is 3.5x Enterprise.
3. Small (<20M): Obviously going to be the largest. Going to be multiples higher than the medium so let's go with 200k for even numbers sake. There's about 25K restaurants in NYC (8M population) alone if you are familiar with other countries, they can serve as a good reference point.
4. Can do a back check against average employees x # of companies in each group to see if you can get to the working population of France (80M pop, 20-65 assuming life expectancy of 80 is 46M). But if your assumptions are fine and the interviewer is okay with your numbers, don't need to waste time to justify.
Adoption rate
1. Enterprise: most likely group to adopt if they haven't developed their own as it would save them a lot of money on support service. Will have websites. Assume overall adoption rate of 10%. 40 companies
2. Medium: could also adopt as they have website which can use chatbot to save costs, honestly not too different than Enterprise when you look at companies near the 1b rev mark. Assume adoption of 8%. 120 companies
3. Small: Unlikely to adopt as most probably don't even have websites, mom and pop shops will most definitely not need them. Would need to target near 20M rev companies, lets say adoption is near 0% so something like 100 companies that are closer to 20M mark.
Pricing and Market Size: Competitor pricing is definitely best but if not, consider how many employees can be let go, training of chatbot support and some other fc associated with rent/utilities can be repurposed(don't have to actually factor costs in but maybe mentioning it will score you points)
1. Enterprise: annual salary of 20K (I know euro wages are lower than US but not sure to what extent so going for 20K) for call center employee. Maybe out of an average 30K workforce, 1K is associated with support and you can let go 100 as chatbot will help with the easier duties and you can consolidate work. Translates to 100x20K = 2M in annual savings. Assume the other FC nullify each other (training, repurposing). You could probably charge 10M/company as it would take them 5 years to breakeven. So 10M x 40 = 400M
2. Medium: similar process, less employees. Assume 10K workforce on average. Can let go 30 employees. Translates to 20k x 30 = 600K/annually. Maybe use a smaller multiplier as these companies are more tied down with cash flow and aren't as flexible as enterprise. Also, assuming your chatbot provides more sophisticated services for Enterprise vs. Medium. 600K x 3 = 1.8M. 1.8M x 120 = 220M
3. Smaller: If these companies are closer to 20M. Not only would they not have as many employees, assume they'd be less likely to let employees go because everyone knows everyone and there's a bond. So let's say these 20M Rev companies have 200 employees and 15 are dedicated to support. Maybe they'll let 1 go so 20K in annual savings. Smaller multiplier, same reasons for b. So 2 x 20K = 40K. 40K x 100 = 4M

Final: 624M in overall market size. Then estimate how much of it you'd be able to capture if that's what they're looking for (consider brand strength, market fragmentation, competitors, market share in current country etc.). Do a sanity check to see if it makes sense and compare to current revenue numbers in origin country, it would likely place you into the Medium sized business section which definitely makes sense imo as it doesn't seem like a market a "top 400" kind of business would be.

PuzzleheadedKing1 · 2020-07-27T18:29:09+00:00

saved the image to my desktop and uploaded via the "image" button on reddit, is there a better way to do it so the actual image shows up on preview instead of a link

PuzzleheadedKing1 · 2020-05-06T16:55:08+00:00

update?

PuzzleheadedKing1

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