dogs barking that can only mean one
thing the Mail's here
yeah we got another reddit mailbag
episode and just reminder why you enjoy
this is not advice I'm not your advisor
it's Saturday
I got my hoodie got some water
we're gonna answer some reddit questions
if I have the cash to pay for a car no
debt and a 24-month mergency fund is
there any reason not to pay cash for a
car I rent an intent on not buying ever
I've excellent credit and I plan on
buying a reasonable used car is there
any downside not really no not much of
one I mean it's the same downside that
anything has where's the the opportunity
cost of it you could probably get a
really low interest rate loan and
theoretically if you invested that
instead you'd probably more than the
rate of the loan but if I had a 24-month
emergency fund I would definitely use
cash to buy a car that's a lot of cash
to be holding around I would definitely
start using it or investing it or
something
Roth 401k versus traditional for jointly
filed taxes and total household income
of $300,000 we filed jointly and I've
talked to my CPA who suggests since
we're in a higher earning bracket would
benefit from the tax benefits of a
traditional 401k my friend who is a CFP
is going the opposite suggesting Roth
401k is a better option I'm confused
well there's a lot of there's a lot of
things happening here okay so one of
these people is a professional you're
employing that's the CPA and knows the
specifics of your situation for sure so
I would lean towards him on that maybe
your friend the CFP is thinking about
some other things but I mean does even
know how much you make and then in
general the higher your earning the
higher tax bracket you're in the more
likely regular 401k is going to make
sense
and there's some really complicated
stuff going on I don't know if you're
eligible for the the new deductions the
section 199 stuff but if you are then it
gets a little more complicated but I
mean it depends and I don't see how the
your friend could have as much
information as your CPA major student
loan anxiety I know this isn't as much
as a lot of people but I've over 40 Cade
student loan debt and it feels
overwhelming my interest rate is five
point one five percent which i think is
pretty good I just hate and I really
mean hate pain that interests every
month I mean it doesn't matter if you
build up a safety fund or if you pay
down the interest before and doesn't
really matter whether you love it or
hate it you just have to pay it off
trying to save on commissions after
transferring Roth IRA to Vanguard I
transferred my full Roth IRA to Vanguard
last week it was previously held by
Merrill Lynch under an advisor you want
to sell everything but they charge $7
per trade you have a hundred different
stocks
I mean how BIG's the account is there
any way I can sell all 100 stocks in one
trade now it's not how it works yeah
it's not how it works
otherwise this cost me seven I mean how
big the account is the question and
there's lots of reasons that you could
hold a hundred different stocks if these
are like $50 positions and that's
obviously terrible but either the
accounts big enough that it doesn't
really matter or the accounts small
enough that it's totally ridiculous that
it was in these stocks to begin with but
don't see any way out claimed single
federal and state status on paycheck
while married how do I fix this you were
claiming single instead of married since
January 2017 I've been getting less
money on your paycheck you've been
married that entire time okay so and
this is this is a really
really interesting question so as a
simple answer but a lot of people get it
confused when you file your taxes each
year when you file a tax return they
look at how much you owe and how much
you paid and they figure out the
difference and then you either get it
back in the form of a refund or you pay
it to them because you owe it to them so
every single year the next year in April
it would get solved when you followed
your tax return what you need to do
going forward is filing updated w-4 and
just change it but otherwise there's
nothing to do you didn't lose money in
2017 you won't lose money in 2018 no
money was lost here long-term capital
gains rates don't change does the Roth
IRA have an advantage over a brokerage
account if you will live on less than
seventy seven thousand two hundred
dollars a year in retirement you're
talking about the fact that long-term
capital gain rates are zero if you're
married and your incomes under seventy
seven thousand dollars yeah they're
still advantages to the Roth IRA like
the entire time while you're working you
wouldn't be paying any taxes on the
growth whereas with the brokerage
account whatever gets paid out in
dividends interest whatever you know
whatever there are transactions those
will be taxable so it would matter the
frictions that you would get to avoid in
the Roth IRA from that point of view and
then most people are gonna end up over
seventy seven thousand dollars of income
I pretty often especially if you're
married let's say the two of you have
Social Security benefits I mean today oh
one spouse at twenty thousand and one at
thirty thousand dollars a year would be
pretty common so you're not gonna end up
having another twenty-seven thousand
dollars a year from something and that'd
be kind of surprising but even then you
don't know what capital gains rates are
gonna do in the future we don't know
what Roth IRA Rays are gonna be treated
like in the future but I would expect
them to continue to have some kind of
tax advantage status
so yes there are benefits there are
pretty clear benefits tax converting
traditional IRA to Roth little personal
finance have recently opened a
traditional IRA thing and I could deduct
on my taxes however move above the limit
I can convert it is there anything I
should expect you had to pay tax on the
gains that's the deal
that's uh that's how it works
liquidate 100 K and Harriet account to
make lazy 3 fund wait for it to rebound
best way to sell the stocks thank you in
advance for any suggestions sorry for
the wallet we got a wallet tax or
everyone up scroll my Roth is fully
funded the 401 K is at its limit
just one want to know what to do inside
the bird to count okay you received it
in 2016 it was up but dropped 6 K in
December yeah 6% down it's December
would have been fine you're debating
liquidating it 8,000 and gains 12,000 in
losses what is the best option to use
for selling let's say do we have that
there we go what is the best option used
for selling market limit etc okay you're
talking about actually what do you need
to do to sell it and then is there
anything blatant that you should keep
I'll just show this portfolio so we got
ETFs ETFs ETFs all three at VP I mean
these are big companies these are all
sp500 type stuff yeah I would just sell
it all and you don't need to do anything
fancy with it this could all be market
order I mean your $100,000 is not gonna
move the market on any of these
positions even if they were all $100,000
they're not gonna move the market so you
should just sell them all now and put
them wherever you want them long-term if
you're not gonna be able to time it well
you'll probably mess it up need help
with my terrible investing bias 53 have
a text verdict ount similar to a 401 K
all right
Thanks I know it should be at least
twice its current value geez
the fiddling with it constantly is
reduced my return a lot often let fear
scare me out of the market periodically
move punch fit to cash
I fear another huge drop is on the
horizon oh you got your crystal ball out
so I'm once again sitting on a huge cash
position as the market has recovered
yeah that's good okay any advice to
overcome myself induced low returns am i
destined for with my flawed logic I mean
it sounds like you need some
professional help
but it also sounds like you probably get
fired by a good portfolio manager I mean
it sounds like you'd be a total
nightmare to work with
well you need to do is have an
allocation that you can stick with when
the market goes down and be happy with
when the market goes up you should be a
little bit upset that your portfolio is
so conservative when the markets going
way up and you're like kicking yourself
for not being more aggressive then when
the market goes down you should be
kicking yourself a little bit for not
being a little bit more conservative but
it needs to be that sweet spot that you
can stay in if you can't if there is no
sweet spot like that for you I don't
know how to help you maybe bring in a
third party to manage it for you would
help with that maybe not I don't know
but at least you've identified the
problem it's a good start