Investing General Discussion

Vanguard Total Index (whole market ETF)

iirc

Yeah Vanguard Total Stock Market ETF.

Was trying to quote the two above but it wouldn't work for some reason.

With the new tax law it is possible to make money if you live in a state with income tax. Here's a rough 3% people could possibly get if they're sitting on cash anyway. This also hinges on the taxpayer already being able to itemize deductions for 2017 without adding this extra state income tax payment. The taxpayer would also need to not move themselves into paying AMT since state taxes are an add-back.

For a quick example, let's say taxpayer is at the 15% marginal rate this year. Next year if taxpayer's marginal rate will be 12%, there is an opportunity to make 3% on a state tax payment.

If taxpayer pays $4,000 to the state prior to December 31st, taxpayer would decrease federal tax by $600 with the Schedule A deduction. Next year on taxpayer's 2018 return they would have a taxable refund of $4,000 that would only be taxed at 12%, or $480.

The gain would be $120 vs. whatever interest you'd lose out on over about three months until the state refunds your money.

This example is specific to these lower brackets, but it is possible for higher income earners as well. It's just something to consider for people living in states with income tax, since the deduction will be gone after this year.

I don't know if we have a tax thread but this can be helpful in the investing section since it's personal finance related.

The same concept applies with prepaying real estate tax if the bracket differences apply. You just wouldn't be able to get your money back via refund with this method. There's a bit more opportunity cost with this method.

I have no idea what you're talking about for the most part with that (seems complicated), but that seems kind of like something no one is going to be doing. If you're in the 15% bracket right now, you likely don't have extra cash to write a check to the state as a floater to get 3% interest on. And not only that, considering the way the market has performed recently, you'd probably be better off investing it or hell, even throwing it into your favorite crypto (granted both of those options come with risk).

Gravel said:

I have no idea what you're talking about for the most part with that (seems complicated), but that seems kind of like something no one is going to be doing. If you're in the 15% bracket right now, you likely don't have extra cash to write a check to the state as a floater to get 3% interest on. And not only that, considering the way the market has performed recently, you'd probably be better off investing it or hell, even throwing it into your favorite crypto (granted both of those options come with risk).

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In those two scenarios there's no guarantee that you'll see a return. The premise is that you already have available cash for a guaranteed return. I agree that you're better off in the market, but we have various people in this thread that are sitting on cash if you read back.

I don't think it's that unreasonable for someone in the example bracket to be financially responsible and have the ability to do this. The example bracket was just a quick and easy way to show that you can do a little tax arbitrage if it fits your circumstances. The idea behind the post was to prompt people to think about potential savings in a unique tax year.

Sold Cisco for 20% gain, prob put it back in spy.

It took a few years more than I had hoped, but I'm finally financially stable. Took a job 5 years ago knowing it wouldn't pay well, but would be a great resume builder. Ended up having to support my girlfriend for a couple years while she was in a similar position but even lower pay, and ran up a bit of CC debt in the process. We both just took new jobs this year making 2x for me and 4x for her compared to our last jobs. Paid off CC over last couple months, and finally started putting money away for retirement.

Went with the Vanguard target retirement date fund because I want to just set it and forget it. From now on I'll set up an autotransfer 20% of my paycheck each month, and maybe check in once a year. We're also putting 1k away each month with a 5 year plan of buying property.

For some reason all of this has made me feel like I'm really an adult now.

Question for non U.S. citizens who live outside the U.S. - I am looking to get exposure to S&P 500 index.

My choices are:

-Directly purchase fund through Vanguard/Ishares (must pay 30% withholding tax)
-Purchase ETF on NYSE (must pay 30% withholding tax)
-Purchase ETF through Irish domiciled vanguard ETF (pay 15% withholding tax through treaty)

I would like to mitigate the 30% withholding tax if at all possible. Does anyone have experience with the [tax advantaged] Irish domiciled ETFs listed by vanguard on the London Exchange? If so, what system is best used to purchase? If someone has a better suggestion to get exposure to US markets, would also appreciate the advice. (FYI, I do not hold an EU passport so cannot use channels that require EU citizenship/address/bank account).

HSA can pretty much be a retirement plan for healthcare, 3300 limit a year single iirc though.

Blazin said:

Buying real estate also grows tax free until you sell it (and with like kind exchanges even that can be delayed) and diversifies your wealth into more than just the stock market.

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Where do you live that you don't pay property taxes mister?

Asked before and kinda forgot. But things have changed a little anyways.


Aside from wanting a cash egg for emergencies.

Should i be taking investment money and paying down my house (3yrs in at like 4%) vs my companies 401k which is meh with no matching but i already have like 20k in from a flat contribution they have. Or open one of these vanguard things. (Can i do that pretax and like texuce my taxable income to boot?)

Or time travel and buy Bitcoin..

30 year term on the mortgage? If you have the liquidity to pay it down significantly I would just refinance to a shorter term (10yr preferably) which should also drop the rate about half a percent. You'll have to pay some fees but those would be recouped fairly quickly as you hit your principal much more aggressively and significantly drop the amount of interest you'll be paying over the life of the loan. I'd then invest the rest into an IRA or traditional brokerage account like Blazin suggests.

This also provides some maneuverability when this bullish market finally hits the skids and corrects, which will allow you to invest more aggressively during a downturn or recession.

Ossoi said:

Where do you live?

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Hong Kong