OT: Anyone tell me how they saved for their home? Thanks.
SpOoKNP
many here have homes and I would like some ideas on where to save for a down
payment.
Background info:
I decided to take a job as a teller at a bank. The reason I took it is because
there are good chances for promotion. Since I have a college degree I will go
else where if after year I cannot find anything in that bank. Right now I am
only making $10/hr. I have been living out on my own in a club area of Indy so
rent is kinda high compared to other areas. I have $3,300 saved in various
stocks. Half of this is now penny tech stocks while the other half I would
consider ok tech companies. These were purchases made in ignorance and I have
since learned a lot about investing. Along with the $3,300 I have about
$1,000 in a pre-tax, tax deferred retirement plan. After a year I plan on
switching that (it's a crapy state plan from my police job) to the better bank
plan. The reason I will switch it in a year is because the bank will not match
until after a year. In my checking account I will have around $1,200 after
this months bills. Of course this will fluctuate a lot. I have spoken with my
parents and they could care less if I moved back home for a year to save money
for my own home. They know the mistakes they made in not investing and want to
help take some bill pressure off me until I am making a decent wage. I am
moving back home in July. Once home I will save $300-$400 a month for the
sole reason to buy a house within a year or so. During this time I would hope
my stocks will rebound to hit $5,000 but who knows what will happen in the
future. If I save $300 for 12 months+the $5,000 then after 12 months I will
have $8,600. Since this doesn't seem that much, I may bump it up to $400 a
month.
My question is _where_ should I save this money? I would like to open a Roth
IRA and know that first time home buyers can pull from this account and not
face a penalty. If I open one up before April 15th I can put 2001s $2,000
limit into it. This year it's up to $3,000 and I could fund the $400 to that.
Other ideas are my E*Trade money market account (I could leave the money sit
in my brokerage account which is a money market account OR actually purchase
shares in a mutual fund). Has anyone pulled from retirement accounts to
purchase a home? If all things work out, I could have the $8,600+my state
retirement account (if I can pull from that for home buying). The second part
of this question is where to invest this money? The market is so low that tech
mutual funds seem to be a good investment right now. If I open a Roth IRA I
can invest in mutual funds and I can do the same in the E*Trade account. I
really would like to get more than 2% on this money. Hoping to hear what
others have done. Thanks to anyone for helping me out.
Ecnerwal
this economy. What makes much more diffrerence is what you put away to
begin with, and putting it someplace solid. Direct deposit is useful
in that you put the money directly into your house account and never see
it in your regular spending money accounts. If you set a time when you
expect to use the money, plain old bank CDs are fine. Otherwise a simple
account to collect it separately, and adjusting your living expenses so
you can put the maximum amount of money in there make the biggest
differences. If you get a raise, live like you didn't get a raise - put
it all in the bank. Once it's in the house account do not touch it for
non-house expenses.
Assuming you're working 40 hours, you seem to be planning to save (once
you move to your parents) at 25% or so. 50% of your take home will make
a much bigger impact; getting to the point of having a 20% down payment
makes a significant difference to your mortgage picture (you work at a
bank - talk to the mortgage folks over lunch about why). If that means
making some lifestyle adjustments, consider making them for a few years.
Goedjn
here it is, anyway:
Conventional wisdom is that:
If you expect to be spending the money in less than 4 years,
you should NOT invest it in anything stock-market based.
Stick it in a money-marked account, or a straight savings account,
or, if you know pretty much WHEN you're going to want it, CDs.
Yes, the interest rate sucks, but if you buy stocks, you risk having
the market burp right when you wanted the money, and then you'll be
stuck waiting an extra 5 years waiting for the market to recover, before
you can buy your house. (On the other hand, if you're willing to risk
waiting
that extra five years, you might want to buy the stocks, anyway).
If, and ONLY if, you're employer is providing matching funds for your
stock-portfolio (and this is unlikely, in anything that you can get
the money out of, short term) should you put money intended for a house
in a stock portfolio.
SpOoKNP wrote:
>
> I searched Google for "Saving for a home" but didn't get much there. I know
> many here have homes and I would like some ideas on where to save for a down
> payment.
> My question is _where_ should I save this money? I would like to open a Roth
Janet Baraclough
from spo...@aol.com (SpOoKNP) contains these words:
> I searched Google for "Saving for a home" but didn't get much there. I know
> many here have homes and I would like some ideas on where to save for a down
> payment.
We worked very hard and lived very poor; cash only purchases, no
credit. We put the money we earned in a guaranteed account, at the
best interest rate possible, with the body we would later be seeking
a mortgage from, to enhance our loan rating. In the evenings we both
did extra jobs from the day jobs, or studied to improve our qualifications.
Janet
Tim J. Johson
But, if you haven't already, I would check into whether your state has
any type of "first-time buyers" program. We used that program when
buying our first home and it was a significant "boost" into getting us
into a home a little earlier than we could have beforehand. The
primary advantage is a very low down, and somewhat reasonable interest
rates.
DO NOT rely on mortgage brokers, real estate agents, etc. to help you
with a first-time buyers program. I read about it in the local
newspaper one day and later, all brokers, lenders and realtors
professed ignorance about any such programs, whether they were really
unaware or not....
I finally contacted the state govt. myself, got directed to the
program and was given a list of lenders who worked with the program.
Nowadays, with the WWW, it would probably be a simple task for you to
find what your area may offer.
C. Brunner
I think that pretty much sums it up.
It's not rocket science. To buy a house early in life (before you
strike oil), you have to prepare well ahead of time. From a very
early age: be very frugal with your choices, save (invest) your money
wisely, and keep your credit squeaky-clean. Either that, or you have
to be fantastically lucky or have parents who are both wealthy and
obscenely generous.
I saved enough from jobs throughout high school and my undergraduate
years of college to pay half my college expenses myself. The rest
came from an undergraduate scholarship. The cost of 4 years of grad
school was covered by the small stipend I got for the research I
worked on. It was break-even, nothing more. Efficient car, cheap
apartment, no tape/CD collection, no trips to Europe (or even to Aspen
or Ft. Lauderdale). Cooked my own meals (no Micky D's). So, I
started Vet School debt-free as well. Managed to build up a $16,000
debt from student loans during those 4 years simply because of the
cost of tuition and expenses. That was about average when I graduated
in 1982.
But, I found a good job right away, had squeaky-clean credit, and had
even managed to squirrel away some money despite the student loans.
(Shhhh!). After working for 3 months, I bought a house by paying 10%
down and assuming an FHA loan. (OK, housing is cheap in the SE U.S.).
That required around $5,500 cash, and I needed a small 2nd mortgage
from the bank to make the whole amount. I broke even when I sold it 3
years later (paid too much in the first place--I was in too big a
hurry). Paid off the 10-year student loans (7% interest) on time.
Now, I'm married to a guy who is at least as careful with money as my
family was. (My parents were Depression kids.) He already owned a
house. We took the principal from my house sale, added our savings,
and bought some rural land, dirt-cheap. Sold it six years later for
the trees, at double what we paid for it. Used that money to pay cash
for a bigger, better tract, saved like crazy for 5 years, and built a
house on it. Now, after 3-1/2 years of house payments, we have 8
years left on our 30-year mortgage. (When we sold his old house, we
put the proceeds toward the principal on this new house.)
We are not wealthy, but we are comfortable and very happy. It just
takes planning, and lots of effort. Neither of us was particularly
lucky, except to find each other. :-)
C. Brunner
Ken Finney
An excellent response! Countryside magazine about once every two years
or so runs a theme article on this topic. What it all boils down to
is deferred gratification. I see the subfactors under this as housing,
transporatation, meals, and entertainment. There are a lot of people
who could never imagine sharing an apartment, driving a $500 car,
eating on less that $1 a day, or not taking vacations.
SpOoKNP
<< If that means making some lifestyle adjustments, consider making them for
a few years. >>
Have done this. Wal-mart Super Centers are great for prices. Plus I wait till
clothing goes on sale to buy it. I just purchased 6 nice sweaters for $6.99
each at Pacific Sunware. I have plenty of money, but I use the store credit
card to build credit AND get discounts in the future. In Aug/Sept. I will go
in there and buy T-Shits at a discount and at buy one get one half off. I
could careless about if that particular style is a year old. My shirts look
brand new and the name brands they sell seem to hold up just fine. Thanks for
the info!!!
Tralrdr
Keep your eye on the goal. Don't waiver. Before you know it you will have
enough $$ saved to get into some serious debt. But, hey, you'll have a house!
My suggestion: Start with a fixer upper that YOU can deal with, no
subcontractors etc, do a nice job, hang on to it for a few years and watch the
market for another fixer upper, sell and move on.
Whats your specialty? Appliances? Landscape? Painting? Carpentry?
Buy cheap and sell even cheaper is my motto. Ha ha ha ha ha
carrie n miller
Janet Baraclough
from spo...@aol.com (SpOoKNP) contains these words:
> lawrence wrote:
> << If that means making some lifestyle adjustments, consider making them for
> a few years. >>
> Have done this. Wal-mart Super Centers are great for prices. Plus I wait till
> clothing goes on sale to buy it. I just purchased 6 nice sweaters for $6.99
> each at Pacific Sunware.
Er...that's not saving, it's spending :-). When we were hard up we
used to buy almost all our clothes second hand in charity shops or
ex-army surplus...still do sometimes. Most western people buy far
more of everything than they require, only to discard it, often
unused, so that they can buy more.
Try living with fewer and less of everything. The only noticeable
difference is that you have more space which would have been taken up
by the purchases you never get round to using; and more money in the
savings account.
> I have plenty of money, but I use the store credit
> card to build credit AND get discounts in the future.
Don't tell me you pay interest at store card credit rates.....aaaargh ....
Janet.
Sylvia Steiger
1. Put as much as you're allowed into whatever retirement plans you
can. That is a WONDERFUL way to save. I had to fight with my DH to get
him to put 15% into his 401k, but we've borrowed from it several times
to buy and improve the land we plan to put our mobile home onto next
month.
2. Although I like the stock market, I'm very leery of tech stocks
because it's just too hard to forecast which will have a great invention
and go through the roof, and which will get left in the dust. I've done
best with expensive stocks that are temporarily depressed: Merck, Volvo,
etc.
3. Consider temporary measures. Our goal is a big house on some land.
We bought a used mobile home four years ago, paid it off in two years,
and started hunting for land. We found and bought the land 1-1/2 years
ago -- it had a well and temporary electric but nothing else. We've
been able to put septic and a 12x20 shed on it and will have permanent
electrie in place as soon as our electrician gets the pedestal he
ordered for us. Meanwhile, our only housing expense for a family of 4
has been the lot rent for the mobile home. We're planning on moving out
next month with a temporary water system because I'm eager to stop
paying lot rent, and then we'll have that money to put into land
improvement each month. (We'll need to, our temporary water system only
has a 20-gallon tank and is above ground, we'll have to at least have a
pitless adapter on the well and underground piping before next winter!)
Anyway, you see my point. Don't know if it would work for you but
something like a mobile home would let you build up equity (IF the
resale market is there in your area) and save on your housing expenses
at the same time.
--
Sylvia Steiger RN BS
Remove "removethis" from address to reply
http://ourworld.compuserve.com/homepages/SylviaRN/quilting.htm
Cheyenne WY, USDA zone 5a, Sunset zone 1a
http://ourworld.compuserve.com/homepages/SylviaRN/land.htm
Home of the Wyoming Wind Festival, January 1-December 31
Larry Caldwell
writes:
> many here have homes and I would like some ideas on where to save for a down
> payment.
> Background info:
> I decided to take a job as a teller at a bank. The reason I took it is because
> there are good chances for promotion. Since I have a college degree I will go
> else where if after year I cannot find anything in that bank. Right now I am
> only making $10/hr.
Find a new job. Banks are notorious for scamming new graduates with the
promise of promotion and paying them dirt. Look to double your current
salary. $10/hr. is just not enough to afford a house. It's hardly
enough to live on. At your income level, nobody is going to qualify you
for a mortgage.
Meanwhile, you might think about taking a second job. You can make
$17/hr driving a milk truck, and be done by the time the bank opens in
the morning.
At the moment your very best course is an aggressive job hunting program.
Treat it like a job. Set production goals, like 4 cold contacts a day, 2
job apps a day and 1 job interview a week. You will have your better job
in short order.
JMartin
Assume my FHA loan ($89,000, 7.5% fixed, $811.91 per month PITI).
Just costs, which are minimal. It's a really nice house, but like
everything else there, they sit on the market forever!
I bought my first house this way. It was out in California where FHA
loans are quite common. Out here, they are not very popular. I think
that has a lot to do with all the older houses. Many of them won't
pass an FHA inspection. Anyways, bought that first house by assuming
a loan with no down payment. That was back when interest rates were
18%! We got 11% and thought ourselves extremely lucky!
I bought another house by using my 401K money. I had 25% of my salary
going in it for a couple years. I was able to get a loan from it, and
pull the rest with a "hardship" withdrawl. Not all plans offer that.
The penalties were offset by the tax savings of home ownership.
A couple years later, I quit my job and moved out here, I terminated
my 401K and used the money to buy the house I mentioned in Terre
Haute. Again, the penalties weren't that big a deal.
FHA loans are great in my opinion. Very low down. Every house I have
ever bought, except the one I am currently living in was bought on a
FHA loan. There does seem to be some kind of stigma attached to them
out here, like they are reserved for single mothers and the socially
disadvantaged. They are there for everyone and I, as a taxpayer,
don't see any reason to not use them.
If you are interested in my house, email me! I'm serious. It's a
great house and I hated to leave it, but I got married and moved to
Illinois. There's plenty of banks in Terre Haute too :)
Bill
easy. I had to really search to find that low priced house.
FHA is a royal pain. It seems that they think all of their home buyers
should have a house in *perfect* condition, up to code, and nothing that
would be unsafe.
Buyers on a budget however want a low priced house so they can live with
the payments. It is OK if there are a few broken windows, a sloping floor,
and needs a paint job. Also these buyers are willing to get a "fixer upper"
and work on it as money comes in later on.
I had a heck of a battle with real estate salespeople; with what I wanted
as a house and with what they knew FHA would not approve, due to excessive
repairs being needed. I would pick out a nice shack, broken windows,
rocking chair on the porch, hound dog watching the flies going by, etc.
Then the real estate person would tell me that it had "earth wood contact",
it had to have a new roof before sale, windows must all be replaced, and on
and on. Also they thought I should buy a house with the maximum payments I
could afford. Many people will buy the most expensive house the lenders
will allow. I was the opposite and wanted the least expensive house I could
find.
I can do repairs myself and needed lower payments so I would have the money
to do these repairs. Finally I found a home with a lot of cosmetic
problems, but in good structural shape. Good enough to just squeak by FHA.
The cosmetic problems such as trashed yard, fence falling down, rusted
electrical wiring mess on front porch, etc. kept the house from selling to
anyone else. But to me these were just minor problems. Other people looked
at the house as an eye sore. I saw a dream house with lots of stuff needing
to be fixed and years worth of fun projects! What more could a fix-it type
guy want?
The house did need a little work to get FHA approval before purchase. The
sellers gave me a key to the house and I went to work. I painted, scraped
moss off the roof, fixed a few electrical no no's, and added screen to the
crawl space vents. (The real estate person told me what needed to be done
to get the FHA approval.) I just hoped my time would not be wasted and the
loan would be approved, which it was. I only spent about $100, but a lot of
time. If the loan was not approved, it would not have been a big deal,
besides the sellers were nice people.
I have since fixed the cosmetic problems on the outside of my house for a
few thousand dollars and now my house now looks like one of those $100,000
dollar jobs. But I have $600 monthly mortgage payments instead of $1000
payments. The $600 includes taxes and insurance BTW.
I figure all the fixin' up needed for my house will take 10 years and cost
$10,000 to $20,000 with me doing all the work. Now had I bought a house in
perfect condition and had $1000 monthly payments for 30 years, then I would
have spent an additional $400 per month, $4,800 per year, or $144,000 extra
over the 30 year mortgage period!
(And I'm griping about the $1,000 cost for the lumber needed for my new
fence...)
John Klausner
at a bank as a teller for a while....pay seemed pretty good for the time
- about 20 years ago, it was about $7 per hour. My observation was that
the banks weren't ready to promote from within - if you wanted to move
up, you had to move sideways - take your experience and go to another
bank that had an opening, and repeat as necessary. The bank I worked
for had a policy that employees "agreed" not to discuss salaries with
other employeed....however, they paid by automatic deposit. By checking
a person's account before and after payday, you could get an idea of
their monthly salary. (I know...but I worked out in a parking lot drive
in by myself and frequently had a lot of time to kill). They also had a
policy of periodic (usually annually) across the board % pay increases.
As a result, I learned that I was making nearly as much as our head
teller (a demanding job with more responsibility and vulnerability to
chewing out than a body should have to put up with) who had been with
the company for about 10 years. She had commented that her sister in
law - who was a supermarket cashier - made about double what she made.
We asked her why she didn't change jobs(if money was tight), and her
response was basically that the teller position was a "better class"
position than being "just a cashier at a supermarket". Shrug. Different
strokes, I guess. She wanted a promotion desperately, but they wouldn't
promote her - she was very good, good head tellers are hard to come by
and they "couldn't afford to lose her" as head teller. They also didn't
want to pay her.
I decided to find other work after getting held up and having the robber
stick a supposed grenade in the drawer (_probably_ wasn't a real one, or
so they told us). Decided they didn't pay enough to take that kind of
risk, and money was just plain likely to draw an undesireable sort of
people.
A job in the hand is worth any number of "probable" jobs, but I agree
with Larry - go to work, but keep looking. And don't get stuck on the
fact that you have that degree...what you learned will help you no
matter what you do, but there are plenty of "low class" jobs out there
that pay well - don't let the luxury of pride get in your way until you
can afford it!
SueK
Larry Caldwell
> I have a house in Terre Haute that I'll sell you with no down payment.
> Assume my FHA loan ($89,000, 7.5% fixed, $811.91 per month PITI).
> Just costs, which are minimal. It's a really nice house, but like
> everything else there, they sit on the market forever!
How is he supposed to make a mortgage payment like that, cover home
maintenance expenses, commute to work, buy food, clothing and pay
utilities on $400/wk?
He can't afford a house until he boosts his income.
Roger Sandmann
We wanted to build a house. First we found some land we wanted and while we
looked for that we finalised our house plans. We got interim financing for
the house and land, did a one time close after completion, the house and
land appraised for enough that we borrowed 90 percent of the apraised value,
which paid off the entire interim note and we didnt put a dime of our own
money down.
that was 6 years ago, we did a 20 year mortgage, then set it up biweekly, we
have less than 8 years to go.
We have the log home we always wanted, on 23 beautiful acres in north texas
and like i said we didnt put a dime of our money in it
"SpOoKNP" <spo...@aol.com> wrote in message
news:20020313102831...@mb-fk.aol.com...
JMartin
Ah, but it is a big house! He can have roommates!
SpOoKNP
<< 1. Put as much as you're allowed into whatever retirement plans you can.
That is a WONDERFUL way to save. I had to fight with my DH to get
him to put 15% into his 401k, but we've borrowed from it several times to buy
and improve the land we plan to put our mobile home onto next
month. >>
This is bad advice. 401(k)s are taxable at _current_ income. This means the
following: Most people go up in income. When they retire, they have a lot of
money coming from different areas. When you pull from the 401(k), your entire
amount is taxable at your _current_ income. Whereas the money you made when
you were at your entry level salary is now being taxed like you were raking it
in. With a 401(k), one should take the match. The reason: The other money
needs to be put in a Roth IRA and Variable Universal Life insurance policy.
Both of these are post tax money, growing tax deferred and you take it out tax
_FREE_. So you could pull $50,000 and that $50,000 does not go on you taxes
for that year. Now if one can fill their Roth IRA AND buy a hugh VUL (maybe
more than they need) then I guess it MIGHT be ok to max out a 401(k), but one
should not do this (at least in Indiana, other states may have different laws).
SpOoKNP
<< Find a new job. Banks are notorious for scamming new graduates with the
promise of promotion and paying them dirt. Look to double your current salary.
>>
I hope your wrong, but once I have a year under my belt I am going to see where
I want to go with my life. Police work may not see to bad after this bank job.
$10 is jack, but I have seen people get promoted and get decent raises. Maybe
it depends on the area of the country. I hope I won't get screwed, but even I
admit I know nothing about banking. There is a dispaching job that pays
$17/hr. Not to bad, but working every weekend and wierd hours is just not what
I want to go for. Going back to school for a chemistry degree may be my best
option. I want to give things a year, then we shall see. Thanks for the heads
up though.
SpOoKNP
<< I have a house in Terre Haute that I'll sell you with no down payment.
Assume my FHA loan ($89,000, 7.5% fixed, $811.91 per month PITI).
Just costs, which are minimal. >>
Too far for me. Sorry. I have a home I am looking at in Shelby County. It's
been on the market forever. Only $55,000 for a decent area and only a few
miles from a major interstate interchange. This would be great cause _if_ I
got a pay raise and promotion then I could pay this house off a lot quicker. I
could live here till I had a family. I guess I will see what happens.
Fred Walter
> I searched Google for "Saving for a home" but didn't get much there. I know
> many here have homes and I would like some ideas on where to save for a down
> payment.
I lived below my means, for about 10 years after graduating,
and bought a cheap run-down-to-crap farm, for cash. (I'm very debt-averse.)
One side effect of living below my means is that the women
that went out with me, they clearly weren't interested in my money
(because it looked like I didn't have any).
> I have $3,300 saved in various stocks.
This is a stupid thing to do, if you want to use the money in the next
year or two. Go to the misc.invest.* groups and ask there why this
is a bad idea.
Tony Stelmack
know
> many here have homes and I would like some ideas on where to save for a
down
> payment.
First - you are NOT going to be able to save enough in any reasonable amount
of time for a 20% down - which allows you to avoid paying Private Mortgage
Insurance (PMI). However, there are many low down payment programs out
there, so this is not a killer problem.
With a low down payment and PMI, you will have high mortgage payments. What
you really need is very good credit and an income such that the mortgage
lenders will give you a loan. The mortgage people at the bank can give you
general guidelines about what they look for. In general, you need at least
a minimum credit history (credit cards that you pay off every month, a small
car loan, etc.). It is also better to not have any debts when you apply.
The lenders generally will allow you to have a mortgage payment that is an
"X" percentage of your unencumbered income. (Income that isn't already
committed to pay other debts.) The "X" percentage varies from month to
month and institution to institution.
One hint - that probably won't do you any good. Some 401k type plans allow
you to borrow some portion of what you have in the plan to buy a house. You
have to pay it back, with interest - but you are paying it back to yourself,
including the interest.
Tony
Gordon Couger
"Fred Walter" <fred_...@hotmail.com> wrote in message
news:e49581aa.02031...@posting.google.com...
It depends on which stocks.
Gordon
John Gilmer
"Tony Stelmack" <tste...@mmcable.com> wrote in message
news:2LTk8.87982$991.19...@typhoon.kc.rr.com...
>
> "SpOoKNP" <spo...@aol.com> wrote in message
> news:20020313102831...@mb-fk.aol.com...
> > I searched Google for "Saving for a home" but didn't get much there. I
> know
> > many here have homes and I would like some ideas on where to save for a
> down
> > payment.
>
> First - you are NOT going to be able to save enough in any reasonable
amount
> of time for a 20% down - which allows you to avoid paying Private Mortgage
> Insurance (PMI). However, there are many low down payment programs out
> there, so this is not a killer problem.
Really? Getting ahead by $20,000 should not be impossibly difficult for a
college grad. Over five years, it's $4k/year (not counting income from
the investment. If you don't take vacations, don't eat out or go to
movies, don't buy expensive or NEW cars, the old bank account should grow
pretty fast.
Commercial banks are usually not the best place to go for home loans. The
best place are various mortgage agents. If you are using a real estate
agent to look for a property the real estate guy will almost certainly set
you up with a meeting with a mortgage man.
Bill
with cash. I did have an old J.C. Pennies card, but they closed my account
because I never used the card.
My mortgage broker "established" credit for me though. She asked me to get
letters from my landlord and utilities saying I had paid my payments on
time (which I always do). I asked for and received the letters with little
difficulty. I guess this is a common thing to ask for?
I don't know what she did with the letters, but that was enough to
establish credit for my loan.
Sylvia Steiger
your keyboard saying something idiotic like "401(k)s are taxable at
_current_ income" is a bad thing, or flat-out-wrong statements like
"post tax money, growing tax deferred and you take it out tax
worth something.
The Rock Garden
"Sylvia Steiger" <mamasylvia...@canada.com> wrote
> You really ought to learn basic economics before you start shooting off
> your keyboard saying something idiotic like "401(k)s are taxable at
> _current_ income" is a bad thing, or flat-out-wrong statements like
> "post tax money, growing tax deferred and you take it out tax
> _FREE_." Hopefully the original poster will figure out which advice is
> worth something.
I have no idea what I'm getting into here, or if you actually know what you
are talking about or not. Perhaps if you could at least quote the pertinent
parts of the post you are replying to?
Skip
Skip & Christy Hensler
THE ROCK GARDEN
Newport, WA
http://www.povn.com/rock/
Lizzie Hart
taken out of our checks (wouldn't go that way now). Bought bank Cd's when we
got the refund. Then they were paying 12-13%. Bought land with owner
financing. Ordered steel house from Tri-Steel in Houston Tx, was delivered
on a truck and we spent the next two years erecting it (wouldn't do that
again either). But was paid for when finished. See it at my half started web
page. http://home.earthlink.net/~lhhart/haven.html
"Bill" <nom...@nomail.com> wrote in message
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dogsnus
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snip
>
> I have no idea what I'm getting into here, or if you actually know what
> you are talking about or not. Perhaps if you could at least quote the
> pertinent parts of the post you are replying to?
>
I'm just trying to figure out what this has to do with misc.rural!
Terri
SpOoKNP
<< You really ought to learn basic economics before you start shooting off your
keyboard saying something idiotic like "401(k)s are taxable at
_current_ income" is a bad thing, or flat-out-wrong statements like "post tax
money, growing tax deferred and you take it out tax _FREE_." >>
Listen dumbass, taking your money out of a fucking Roth IRA is TAX FUCKING
FREE. Do you hear that? If you don't believe me look it up on the net. Also,
when 401(k)s are taxable at current income, that is usually a bad thing. Want
to know why? You don't take out of the 401(k) till your retired. At
retirement age you have a lot of things going for you if you saved. A lot of
money, perhaps a taxable pension, mutual funds, CDs, and NO home mortgage to
write off in taxes. Those who start pulling for hugh 401(k)s cause they
invested wisely pay tax on that money. What they don't understand is this:
The $1,000 or whatever they put in when they were making $24,000 a year might
be taxed at a $50,000 income level. Thus they are getting screwed.
The folks I talked to about financial planning when I was a financial advisor
were better off putting any extra money into a Roth IRA (tax deferred growth,
tax FREE withdrawals) and setting up a Variable Universal Life insurance
policy. Believe what you want. I wish I could show you the tax control
triangle, but I can't. You don't understand that most people who get the
$2,000 traditional IRA write-off just blow that money. People are much better
opening a Roth IRA and never maxing out their 401(k). Fucking employers tell
people to do this for a few reasons: 1-some plans people buy company stock.
Those idiots maxing out the plan are just buying more company stock.
2-Companies get tax write-offs. With a 401(k) type plan you take the match,
that is it. The match is free money and we don't leave it 'sitting on the
table'. Any other money goes into a Roth IRA and monthly payments for a VUL
insurance policy. I hold a Series 7, Series 66, and insurance license. Though
I no longer give financial advice for money I know what the hell I am talking
about. Why don't you get your fact straight before spouting off bullshit that
maxing 401(k)s is a good thing. 401(k), HR-10, 403(b) plans are all taxable at
current income. When you get to 70.5 and HAVE to take the money out...most
people find they are forced to take out money and that money is taxed as earned
income. If you take money from your Roth IRA or distributions from a VUL, that
money is non-taxable. You do not report it and it is not taxed. If you
decided to pull $60,000 from your Roth at 62 you don't pay tax on a dime of it.
Tax defered growth is a good thing. Even better is when this growth can be
taken out without paying ANY tax.
SpOoKNP
<< I have no idea what I'm getting into here, or if you actually know what you
are talking about or not. Perhaps if you could at least quote the pertinent
parts of the post you are replying to? >>
I worked for a $800 billion company. I know what I am talking about. The
average person usually can use the maxing out amount of their 401(k) to put
that into a Roth IRA or get a bigger Variable Universal Life insurance policy.
In the end it all works out.
Sylvia Steiger
lack of logic is consistent. Have fun, I'll be ignoring this thread
from now on.