What's your saving strategy?
Nov 19, 2008 at 8:42 PM Thread Starter Post #1 of 13

Illah

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Just wanted to poll here to get an idea of savings strategies. I know to some degree this is income dependent - I'm sure the wealthier ones among us can max out their 401k's and Roths each year along with a number of other investments
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But still, from a percentage level I'm interested to see how some of us break it out.

I'll start:

10% pre-tax to 401k
~5% post tax to Roth
~10% post tax to high interest savings

My savings are getting to a good level so eventually I'll start shifting my contributions there to the Roth or some other place (not fully decided yet).

--Illah
 
Nov 19, 2008 at 9:11 PM Post #2 of 13

helicopter34234

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What funds do you invest in within these accounts? I am a relatively nascent investor, I just finished reading "A Random Walk Down Wallstreet" as well as severl other books on investing (in the past month) and reading as many online articles as I can find. I have decided to go no load low ER index funds all the way (Vanguard in particular). That way I can dollar cost average and diversify without paying hefty transactions costs. I started entirely with the S&P fund because I imagine that the market is very undervalued right now but some of the smaller companies might not make it out alive. In the future I will probably shift over to a broader total market index and maybe 10%-20% in bond indexes (I am only 25 y/o).
 
Nov 19, 2008 at 9:28 PM Post #3 of 13

Uncle Erik

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I use automatic withdrawls to a high-yield savings. The rest goes into real estate and a little to stock. I let the dividends reinvest and have never touched them. I tend to avoid managed funds and anything that generates fees for a broker or agent.
 
Nov 19, 2008 at 9:34 PM Post #4 of 13

krmathis

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I put aside 25-30% of my post tax income on high interest saving (7% interest).
Fully aware that I might get more profit by investing in funds and/or stocks, but not gone there yet.
 
Nov 19, 2008 at 11:02 PM Post #6 of 13

marvin

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8% pre-tax to 401K, all in bonds/money market
26% post-tax to high yield savings/CDs

I normally invest in low overhead index funds but pulled out in January this year due to a bit of foresight and a lot of luck. Still in my mid-20's though, so a total loss wouldn't have hurt too badly. Now I'm sitting on my hands waiting for the Feds to get their hands out of the market and let the whole thing bottom out.
 
Nov 19, 2008 at 11:11 PM Post #7 of 13

El_Doug

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6% pre-tax to 401k (max allowed, 3% matched by employer)
maxed-out Roth IRA ($5000 this tax year)
15% to fidelity index funds

both retirement funds are also currently invested in index funds


EVERYONE interested in long-term investment should seriously consider index funds. 75%+ of managed mutual funds perform below the market, and index funds by default have significantly smaller fees attached to them. of course, given the current state of things, one might consider simple high-yield savings accounts...
 
Nov 20, 2008 at 12:40 AM Post #8 of 13

F107plus5

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I was lucky when we planned out our retirement. It was easy then.

Always maxed out Social Security every year. Always maxed out 401k from the inception of 401. And had two significant company pensions to boot.

We were cool. Retirement was gonna be easy. Real easy.

Then we adopted four of our Grandkids.
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Nov 20, 2008 at 12:50 AM Post #9 of 13

DanG

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Everything goes to my bank account. No way I'm going to put anything in the stock market these days. And I could use the money! Plus, the 3,8% I get here in my German bank account isn't so bad.
 
Nov 20, 2008 at 1:07 AM Post #10 of 13

kansei

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I put 15% in my 401(k) and buy my wife IRAs every year. This strategy has proven good until recently when I lost about $70k. I hope I get some of it back when the market improves.
 
Nov 20, 2008 at 2:46 AM Post #11 of 13

helicopter34234

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Just some fun facts about the stock market which I read in "A Random Walk Down Wallstreet." The equity market as a whole has provided a little over 10% annual return on investment since the 1920's. In the last several years that number might be a little closer to 7.5% (prior to the crash). Bonds on average returned about 5.5%. Stocks are indeed volatile and some years provided as bad as -50% return, but over the long term stocks always beat out bonds (which certainly beat out bank accounts). In fact over every single possible 25 year period since the 1920's stocks have beaten bonds in terms of average annual return. Even if you invested right at the peak before a crash, in 25 years you would still have done better than bonds. So if you are young and investing for retirement (further than 25 years in the future) then regardless of how the market is you should consider investing a large portion of your portfolio in equity or real estate trusts.
 
Nov 20, 2008 at 3:31 AM Post #12 of 13

chesebert

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Quote:

Originally Posted by helicopter34234 /img/forum/go_quote.gif
Just some fun facts about the stock market which I read in "A Random Walk Down Wallstreet." The equity market as a whole has provided a little over 10% annual return on investment since the 1920's. In the last several years that number might be a little closer to 7.5% (prior to the crash). Bonds on average returned about 5.5%. Stocks are indeed volatile and some years provided as bad as -50% return, but over the long term stocks always beat out bonds (which certainly beat out bank accounts). In fact over every single possible 25 year period since the 1920's stocks have beaten bonds in terms of average annual return. Even if you invested right at the peak before a crash, in 25 years you would still have done better than bonds. So if you are young and investing for retirement (further than 25 years in the future) then regardless of how the market is you should consider investing a large portion of your portfolio in equity or real estate trusts.


What about muni bond? if you are in a higher tax bracket (40%+) you are probably better off with muni bonds since the income is tax free and its much much safer.

There is nothing wrong with putting most of your money in muni bonds and expose a small portion of your portfolio (401k and IRA) to stocks

Like most people I don't like paying taxes
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.... wait I just realized I am part of the minority here in America
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Nov 20, 2008 at 4:48 AM Post #13 of 13

Seaside

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If you're able to save some money after paying all bills, mortgages and taxes, you're doing quite well.

I am not getting six fugure salary yet.
Thus, the only way to save some money for guys like me is buckle up the belt even more tight, made myself looks like a homeless.

By doing that, I was able to put approx. 2K every month into my saving accounts for last few years, but I don't think I can do that any more. That sucks.

No real portfolio except US bonds and saving accounts at this time. I guess I am too lazy for diversifed portfolio.
 

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