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He's right. I don't know the cap never been an issue.

 

http://www.irs.gov/Retirement-Plans...yee/Retirement-Topics-IRA-Contribution-Limits

 

Peter Lynch and some old guy from Omaha. The Magellan fund treated us veddy veddy good.

Gary

 

from a 'mantra' perspective, i don't disagree.

say you want to buy a used truck.
for ease of math, let's say it cost 10,000
you have 100,000 in savings and aren't adding to it at all (makes the math way easier)
and we'll use a 10 year run as the outcome stream

avg savings is no where near 1%, but i'll give you 1%.
But if you can earn 1% on your savings, after 3 years, you will have
103,044.17
compounded monthly.
after those 3 years, you buy said truck cash.
you now have 93,044.77 to save for the next 7 years at 1%.
after those 7 years, $99,788.37 is what you have left.

or take a 0% loan with 0 down and have the truck for those 3 years.
so, you have 100,000 still in the bank, but every month, you pay out 10,000/36 = 277.78
This math is a bit more complex to calculate monthly....
assuming we get interest paid before the payment is made (as order will slightly change figures).
1% apy is actually 0.9954457372153946 apr on a monthly basis.

using excel, I came up with
93470.476


and at the end of those next 7 years, you will have 100,244.93

it's not much of a difference at $430 odd dollars over 10 years. I fully agree. and it requires you have a bankroll in the first place (ie, move 100k to even 50k and your earnings are reduced by 2/3 to $160 and change), but it proves that taking on debt is actually profitable if you have cash on hand.
And as above, it also "improves your quality of life" by having a vehicle under warranty for those 3 years and basically eliminates any costs of repairs that a 'paid for' vehicle will likely incur at least a couple hundred bucks worth over 3 years.

 

yes, roth 5500, ira 17,5. each separated limits.

 

I don't know what hat your pulling these numbers out of, but that's a lot of hogwash. A non-fee based Financial planner takes nothing from the investor on most products, and the investor does not lose any money. They are paid via commissions directly from the investment firms. For example if you put 100k into a Vangaurd fund, Vanguard pays your planner a commission on that investment. It does not come out of your investment, you end up with a 100k in the fund. Those commissions are also disclosed to you by law, prior to making the investment. This insures you are being put into a proper product for your scenario, instead of a product with a high commission that is not right for you.

In addition, these commissions are mostly set by SEC regulations, and are the same whether you use a financial planner, go direct to an institution, or your 401k administrator (the company that provides yoru company with the 401k..) does it. They all get the same commission. So don't throw out the argument "Well, then they are taking money from the fund...". It's all part of the "administrative fee's" which includes salaries for the brokers, salaries for the administrators, cost of doing business....

So you should re-think your numbers. The number your missing is, a good FP knows what they are doing and how to invest money for different scenario's, unlike most of us regular folk who usually make a mess of it, which brings me to:

YIKES!

 

Got a link to support that?

 

A new CD every month? YIKES a gain! Why not just go get a job for retirement income, McDonalds pays retirement folks fairly well with full beni's and meals! Because filling out paperwork for these investments and to withdraw them is going to be a full time job!

 

It's 5500 max ira traditional & roth. 17500 max on 401k.

To many i's k's & q's here I'm getting confused.

 

On everything I've bought with 0% offered it had a cash off option if paid in cash. The true interest cost in the 0% deal is factored in in the overall price.

 

This.

 

Wow! You just dont stop do you? I cant disagree with this strongly enough. A commission based FP has a massive conflict of interest since they are getting paid to sell you something. They are just another salesperson and frankly I think its ridiculous they get to call themselves advisors when they are not operating in their clients interest only.

 

Question- I have some money I want to invest in the market.(Non IRA) I want a low cost mutual fund and since it will be a taxable account I am looking for a fund that doesn't have a lot of short term gains. I have some money in a small cap fund and I have to pay quite a bit of taxes on it each year.

 

You also have to pay taxes on that interest, so there may be more savings (right?), but I am also against most debt.

 

I would love to help but giving specific investment advice is something I don't do.

 

Understood, but aren't there certain types of funds that have a lower tax consequence? ie index funds

 

Look into broad index funds and ETFs. The more of the market you buy should help you.

 

So your small cap is making good returns and requires taxes paid on those earnings - not really a bad thing.

off the top of my head - municipal bond funds I believe are tax free, nor will they return as much as a small cap
other option is roll it into a Roth and the earnings grow tax free, the initial capital investment can be withdrawn tax free, earnings have to be seasoned 5yrs for tax free status

 

You make a statement like that and the below and say "I don't stop"?

That's an interesting comment. So you know some FP's that are commission based that do NOT operate in their clients interest? Nice folks you know, nice work. This is a hilarious argument I often here and chuckle at. So let me get this straight, a FP who gets a "fee" based on the total amount of money invested, is different than a "commission" based on the amount of money invested. hmmmm.... interesting!


I know very closely a total of 6 FP's, all commission based. I would trust any of them with just about anything. I know 2 fee based planners, I would not give either of them a piece of firewood to watch, and that is the truth sorry. The funny thing is, they both know that. So I can see where your mis-information might come from.

Education: A commission FP does not "sell" anything. They evaluate your position and "advise" you on how to better your position. If they are "selling" you something, find another Financial planner. I'm 100% sure there are bad ones out there, just as there are good and bad places to buy a chainsaw.

Do yourself a favor and find a trustworthy financial planner in your area and speak with them. Preferably someone that is referred to you from a friend or colleague. Most people focus on small parts of their investments rather than the big picture, an FP can help you with that.