College Savings - buy/sell comics or tax free savings plan?? 0

[lizards2]

My usual comments about "investing" in comic books:

 

 

 

 

 

[Pirate]

put 10k on the Packers.

[drbanner]

I'm in my mid-40s and have seen my 401K blasted twice in my lifetime. I may never catch up. I wasn't actively investing in tech stocks, I was conservative, S&P 500, Russell 2000, etc., it didn't matter.

If you remained invested in the market, then you've easily caught up by now.

Yep, not only would you have easily caught up, even if you bought at the pre-recession peak (the S&P 500 peaked at ~1,550 before the 2007/2008 recession), you would still be up a minimum of 50%.

 

BUT...the trick was not only staying in during the ups and downs, but continuing to invest during the down times (i.e. $$ invested during 2009 have more than doubled). That was the trick anyway, who knows what the next 5 years holds.

[the blob]

I'm in my mid-40s and have seen my 401K blasted twice in my lifetime. I may never catch up. I wasn't actively investing in tech stocks, I was conservative, S&P 500, Russell 2000, etc., it didn't matter.

 

If you remained invested in the market, then you've easily caught up by now.

 

The people who really screwed themselves were the ones who sold out in early 2009 at the bottom of the market. A lot of people have trouble resisting the urge to pile into the market on the way up and bail out on the way down. Buying high and selling low is a key reason why the average investor earns significantly less than the market averages.

 

Sure, I've caught up, I didn't sell anything or even do any major tweaking (at some pointed I got less S&P 500 heavy) but I don't think I have anything close to an annualized, compounded, 8% return, or any similar number so many people seem to assume the market gives you.

[Vorpal]

The stock market is pretty high right now. Maybe we are about to hit 4 years of stocks hitting tremendous peaks due to the new administration, but that seems unlikely without a crash, that might happen in the middle or whatever and then you spend years trying to catch up, so sticking it in equities isn't necessarily "safer" unless you can time these things...something plenty of folks with MBAs working on wall street can't do.

 

Correct on both accounts. (a) 5 years might be too short of a timeframe to "guarantee" you'll still have the $10k you put in... but most likely you'll have made money. (b) Timing the market is a fool's game.

 

I'm in my mid-40s and have seen my 401K blasted twice in my lifetime. I may never catch up. I wasn't actively investing in tech stocks, I was conservative, S&P 500, Russell 2000, etc., it didn't matter. One day I will try to figure out what my annualized returns have been (because the fund people don't really go back 15-18 years with that data, and I did most of my contributing from 1998-2004). I seriously doubt they have been 8%.

 

As long as you didn't pull your money out after the crashes, you've done very well if you were invested in funds like the S&P500 and Russell 2000, etc. From 1/2004 to 1/2017, the S&P500 has returned 98.83% (as in your money plus that percentage) during that time period with reinvested dividends - and that's adjusted for inflation.

 

https://dqydj.com/sp-500-return-calculator/

 

Taking that 10K and putting it into a money market at today's rates will give you what, $10,750 after 5 years?

 

Money market is trash for returns, but it takes zero work and you'll definitely have more than you started with.

[the blob]

I'm in my mid-40s and have seen my 401K blasted twice in my lifetime. I may never catch up. I wasn't actively investing in tech stocks, I was conservative, S&P 500, Russell 2000, etc., it didn't matter.

If you remained invested in the market, then you've easily caught up by now.

Yep, not only would you have easily caught up, even if you bought at the pre-recession peak (the S&P 500 peaked at ~1,550 before the 2007/2008 recession), you would still be up a minimum of 50%.

 

BUT...the trick was not only staying in during the ups and downs, but continuing to invest during the down times (i.e. $$ invested during 2009 have more than doubled). That was the trick anyway, who knows what the next 5 years holds.

 

I didn't have any real spare money in 2009, everything in there was contributed from 1998-2004 when I put the max I could in. So I did well as things picked up from 2001-2004, but got hammered in 2000-2001.

 

I have a pension at my job, which I have been in since 2004 and why I haven't been contributing to my 401K, but I don't know if I can stay here another 7 years, which is what I need to do for it to be worth anything substantial.

 

The "never catch up" part is from some article I read about people of about my age who have really had their net worth/retirements thrown off track by these crashes. Baby boomers who socked away money a chunk earlier have had much better annualized returns.

 

 

Edited January 20, 2017 by the blob

[Cruzin' Thru Comics]

Put half into savings and wait for a great deal on a collection to come up with the rest. A great colllection might only come once or twice a year but it will. I picked up a comic and toy collection last year for $200 and sold most of it for over $2500. Most of these savings programs just won't give you that type of return that quickly.

[the blob]

The stock market is pretty high right now. Maybe we are about to hit 4 years of stocks hitting tremendous peaks due to the new administration, but that seems unlikely without a crash, that might happen in the middle or whatever and then you spend years trying to catch up, so sticking it in equities isn't necessarily "safer" unless you can time these things...something plenty of folks with MBAs working on wall street can't do.

 

Correct on both accounts. (a) 5 years might be too short of a timeframe to "guarantee" you'll still have the $10k you put in... but most likely you'll have made money. (b) Timing the market is a fool's game.

 

I'm in my mid-40s and have seen my 401K blasted twice in my lifetime. I may never catch up. I wasn't actively investing in tech stocks, I was conservative, S&P 500, Russell 2000, etc., it didn't matter. One day I will try to figure out what my annualized returns have been (because the fund people don't really go back 15-18 years with that data, and I did most of my contributing from 1998-2004). I seriously doubt they have been 8%.

 

As long as you didn't pull your money out after the crashes, you've done very well if you were invested in funds like the S&P500 and Russell 2000, etc. From 1/2004 to 1/2017, the S&P500 has returned 98.83% (as in your money plus that percentage) during that time period with reinvested dividends - and that's adjusted for inflation.

 

https://dqydj.com/sp-500-return-calculator/

 

Taking that 10K and putting it into a money market at today's rates will give you what, $10,750 after 5 years?

 

Money market is trash for returns, but it takes zero work and you'll definitely have more than you started with.

 

OK, I guess I have made almost 8% since 2004, but not including fees for the funds/401K, which are not included in that calculator. I tend to pick low fee funds, but compounded that probably knocks me down to 7%.

 

OK, I guess not so bad.

 

But it's actually a chunk less because the money I put in there in 1998-2000 ultimately got obliterated -- my rate of return from 1998 - 2004 was terrible -- you have to look at each year's investments to really know...far too complicated for me to figure out.

Edited January 20, 2017 by the blob

[drbanner]

I didn't have any real spare money in 2009, everything in there was contributed from 1998-2004 when I put the max I could in. So I did well as things picked up from 2001-2004, but got hammered in 2000-2001.

 

I have a pension at my job, which I have been in since 2004 and why I haven't been contributing to my 401K, but I don't know if I can stay here another 7 years, which is what I need to do for it to be worth anything substantial.

Lucky to get a pension opportunity on top of your 401K! You can see the annualized returns on your 1998 - 2004 contributions using that great link above, I think all those years are at between 5 and 10% or so.

[the blob]

I didn't have any real spare money in 2009, everything in there was contributed from 1998-2004 when I put the max I could in. So I did well as things picked up from 2001-2004, but got hammered in 2000-2001.

 

I have a pension at my job, which I have been in since 2004 and why I haven't been contributing to my 401K, but I don't know if I can stay here another 7 years, which is what I need to do for it to be worth anything substantial.

Lucky to get a pension opportunity on top of your 401K! You can see the annualized returns on your 1998 - 2004 contributions using that great link above, I think all those years are at between 5 and 10% or so.

 

According to the calculator, the money I put in to the S&P 500 from 1998 - 2001 had a negative overall rate of return by the time I left my old job in May 2004, even with things picking up in 2002 - 2004.

 

I guess it makes me have less blind faith in the market... basically the first $30-$40K I put into the market got hammered big time. losing that early has a profound negative impact on your lifetime retirement..you lose A LOT of compounding. not as bad as investing in turok 1s, true. kind of like spending $100 on a nice New Mutants 87 back in 1993...

Edited January 20, 2017 by the blob

[drbanner]

According to the calculator, the money I put in to the S&P 500 from 1998 - 2001 had a negative overall rate of return by the time I left my old job in May 2004, even with things picking up in 2002 - 2004.

 

I guess it makes me have less blind faith in the market... basically the first $30-$40K I put into the market got hammered big time. losing that early has a profound negative impact on your lifetime retirement..you lose A LOT of compounding. not as bad as investing in turok 1s, true. kind of like spending $100 on a nice New Mutants 87 back in 1993...

I'm confused, did you cash it all out in 2004 and take it out of the market? If you left it invested, then every $$ you put in from 1998 - 2004 is worth more today than when you put it in. For example, your contributions in 1998 have earned 6.5% annually for the last 18 years.

[aerischan]

OK, I guess I have made almost 8% since 2004, but not including fees for the funds/401K, which are not included in that calculator. I tend to pick low fee funds, but compounded that probably knocks me down to 7%.

 

OK, I guess not so bad.

 

But it's actually a chunk less because the money I put in there in 1998-2000 ultimately got obliterated -- my rate of return from 1998 - 2004 was terrible -- you have to look at each year's investments to really know...far too complicated for me to figure out.

I hear ya. Fund options on most 401k plans suck.

 

Very lucky we have access to low cost Vanguard funds on ours. I just have retirement savings mostly in Vanguard TR2040 (VFORX) so it's on autopilot. Also have a smattering (5% or thereabouts) for speculation in Vanguard Health Care Index ETF (VHT) bought via limit orders at $118-120.

 

Five years is a pretty short time frame so I'd probably do something like 35/65 to 65/35 stocks/bonds depending on risk tolerance. Maybe something like VG Balanced Index VBIAX (50/50) so I wouldn't have to bother with rebalancing.

 

Personally, I find it best if I don't check my account frequently (maybe just every quarter or once a year) and just have contributions/investments on auto.

Edited January 20, 2017 by aerischan

[the blob]

According to the calculator, the money I put in to the S&P 500 from 1998 - 2001 had a negative overall rate of return by the time I left my old job in May 2004, even with things picking up in 2002 - 2004.

 

I guess it makes me have less blind faith in the market... basically the first $30-$40K I put into the market got hammered big time. losing that early has a profound negative impact on your lifetime retirement..you lose A LOT of compounding. not as bad as investing in turok 1s, true. kind of like spending $100 on a nice New Mutants 87 back in 1993...

I'm confused, did you cash it all out in 2004 and take it out of the market? If you left it invested, then every $$ you put in from 1998 - 2004 is worth more today than when you put it in. For example, your contributions in 1998 have earned 6.5% annually for the last 18 years.

 

No, I just left it in. my job let me do that. It has roughly doubled since then, almost 13 years. The old "rule of thumb" was to expect a doubling every 10 years though. I know that doesn't "seem" like a lot, but over the course of 35 years that means I "lose a doubling." pretty big deal going into age 60whatever with $500K banked ionstead of $1 million. obviously, this is very unscientific and all. believe me, there have been articles written about this. the beating i (and others my age for whom these were our earliest investments) took on those 1998-2001 investments is going to cost us for years because that's a lot of lost compounding. the losses in 2009-2010 are less of a big deal. anyway, i know i'm being whiney and don't have the computational ability to figure it all out. a lot of GenXers like me have NOTHING saved, so I should be happy.

Edited January 20, 2017 by the blob

[aerischan]

According to the calculator, the money I put in to the S&P 500 from 1998 - 2001 had a negative overall rate of return by the time I left my old job in May 2004, even with things picking up in 2002 - 2004.

 

I guess it makes me have less blind faith in the market... basically the first $30-$40K I put into the market got hammered big time. losing that early has a profound negative impact on your lifetime retirement..you lose A LOT of compounding. not as bad as investing in turok 1s, true. kind of like spending $100 on a nice New Mutants 87 back in 1993...

I'm confused, did you cash it all out in 2004 and take it out of the market? If you left it invested, then every $$ you put in from 1998 - 2004 is worth more today than when you put it in. For example, your contributions in 1998 have earned 6.5% annually for the last 18 years.

 

No, I just left it in. my job let me do that. It has roughly doubled since then, almost 13 years. The old "rule of thumb" was to expect a doubling every 10 years though. I know that doesn't "seem" like a lot, but over the course of 35 years that means I "lose a doubling." pretty big deal going into age 60whatever with $500K banked ionstead of $1 million. obviously, this is very unscientific and all. believe me, there have been articles written about this. the beating i (and others my age for whom these were our earliest investments) took on those 1998-2001 investments is going to cost us for years because that's a lot of lost compounding. the losses in 2009-2010 are less of a big deal. anyway, i know i'm being whiney and don't have the computational ability to figure it all out. a lot of GenXers like me have NOTHING saved, so I should be happy.

Not really. Stock market being down when you're just starting to invest is a good thing. That means you're buying stocks on sale and there are plenty of years to recover. It's also a chance to test your risk tolerance.

 

It's when you're close to retirement and market swings make more of a dent in your portfolio than contributions that a downturn can be really painful.

Edited January 20, 2017 by aerischan

[KPR Comics]

Exactly. You shouldnt fret about price until you are a seller (i.e., when you start withdrawing). Until then, you are a net buyer/accumulator.

[rjrjr]

I can't believe this is an actual question.

 

My thoughts exactly!

[rjrjr]

I'm in my mid-40s and have seen my 401K blasted twice in my lifetime. I may never catch up. I wasn't actively investing in tech stocks, I was conservative, S&P 500, Russell 2000, etc., it didn't matter.

 

If you remained invested in the market, then you've easily caught up by now.

 

The people who really screwed themselves were the ones who sold out in early 2009 at the bottom of the market. A lot of people have trouble resisting the urge to pile into the market on the way up and bail out on the way down. Buying high and selling low is a key reason why the average investor earns significantly less than the market averages.

 

Sure, I've caught up, I didn't sell anything or even do any major tweaking (at some pointed I got less S&P 500 heavy) but I don't think I have anything close to an annualized, compounded, 8% return, or any similar number so many people seem to assume the market gives you.

 

I'm in my late 40s, invested conservatively in index funds the entire time, and have done better than 8% over that time.

Edited January 20, 2017 by rjrjr

[Bird]

okay, you stated that you are not hurting for money, then this is what you should do (I rarely tell others what to do but I got it this time!)

 

1) Put the $10K in a 529 or other savings program.

 

2) Keep that information to yourself.

 

3) Tell her you are going the comic flipping route. Use your money, not the inheritance, but make her think she is using her inheritance money.

 

4) At college time give her which ever account has more money in it. (Yes, I understand a 529 will need the exact $ to go to college bills but you get the idea.)

 

She learns business, math, people skills etc. without the risk, which you as a good daddy cover for her.

[shadroch]

You are trying to compare a passive investment with what would amount to a part time job.

Invest the money now and add $20 of your own each week. That's paying yourself $5 an hour for all the time you aren't working at flipping the books.

[1Cool]

okay, you stated that you are not hurting for money, then this is what you should do (I rarely tell others what to do but I got it this time!)

 

1) Put the $10K in a 529 or other savings program.

 

2) Keep that information to yourself.

 

3) Tell her you are going the comic flipping route. Use your money, not the inheritance, but make her think she is using her inheritance money.

 

4) At college time give her which ever account has more money in it. (Yes, I understand a 529 will need the exact $ to go to college bills but you get the idea.)

 

She learns business, math, people skills etc. without the risk, which you as a good daddy cover for her.

 

Interesting idea but it may be a moot point since it sounds like she would rather just invest the money rather then go the comic route. I'm sure she can make way more in flipping books but it's got to be her decision in the end. I got my own inheritance that I'll probably buy books with so I guess we will see who comes out ahead in 5 years.