NT: Official Personal Finances Thread

[Xennial]

 
I would pay $0 in taxes on investment income at the 15% tax bracket as long as I make under $72,500 in investment income (married filing status). First 20K is tax free due to the married filing $12,200 standard deduction and personal exemptions of $7,800. So I could pull in 90K from investments and still pay $0 in taxes.

Thank you for simplifying it, I just directed people to the articles to learn about it for themselves if interested.

Does it change much if you're not married?

 

[pdino]

^For majority of people it is a great idea, just a little more planning and micromanaging, but seems the yields are roughly six figures

 

[capital sb]

 
Does it change much if you're not married?

Drastically, single filers get the short end of the stick. $37,650 is the max income for single filers, $6,200 is the standard deduction, personal exemption $4000 .

$47,850 would be the max income to pay $0 in taxes for a single person. This only works if you do not work at all, if you take a paycheck or salary you will owe taxes.

 
^For majority of people it is a great idea, just a little more planning and micromanaging, but seems the yields are roughly six figures

Exactly, it definitely isn't for everyone. Just giving people a different perspective of retirement/financial independence.

 

[slicknick951]

Wow our stories are very similar. My girls parents moved to fl when she was 19 and my girl ended up living with her sisters inlaws. Horrible situation. She ended up getting a small studio by herself but it was hard for her at the time because she was in school and working fulltime at a daycare.

I ended up moving in with her to her small studio because i was there most of the time and i figured it would be good to know how it was to live together. (Huge mistake)the living space was way too small for the both of us and we ended up moving to a bigger place. I honestly think if we stayed there we would have broke up it was stressful living like that. The next place was a great size for us and we were good there and began saving for a place to buy.

That was from about 20-25

Our plans ended up being pushed into the fast lane when our landlord decided that they wanted to sell so as of last may we moved in my mothers house to finish saving and close on our coop. We were supposed to out by September but one thing happend after another but we should be closing Monday.

If i stayed home i think we could have saved more not sure what i would have spent it on but i prob wouldnt have the same mindset that i have now. I hate paying rent but i see how not being commited can benefit some people's lifestyles

 

[stay lurkin]

Good thread.

I am dedicating 2016 to paying off debt as well. About 16k outside of student loans . I just barely barely graduated at age 29 but landed a great job. Blessings on top of blessing for reals.

In my younger years I had a job making about 40k while living with my parents. From about age 19 to 24. I am sure you guys can guess the rest of the story. Anyways, I got laid off and was left with a ton of bills that I couldn't hope to pay. I became more serious with school so that threw in another obstacle as well when it comes to making money to pay those bills. I have essentially just been surviving for the last 4 years or so so I could finish.

ANYWAYS, all of this bad debt has been hanging over me like a cloud and has been a deterrent in my life in so many ways. And I am not going back to those places again

I am super grateful that I have learned my lesson and am looking forward to the next chapter in my life.

Just remember that material things have no real value outside of the moment. And also the pain poor financial decisions has caused you and those around you. Keep that money tight and remember to stay focused on things that are truly important because the minute you forget you will fall for that lie again.

 

[Xennial]

 
Drastically, single filers get the short end of the stick. $37,650 is the max income for single filers, $6,200 is the standard deduction, personal exemption $4000 .

$47,850 would be the max income to pay $0 in taxes for a single person. This only works if you do not work at all, if you take a paycheck or salary you will owe taxes.

Exactly, it definitely isn't for everyone. Just giving people a different perspective of retirement/financial independence.

Ok so you wouldn't recommend this route for non married people

 

[yeah]

1. Might sound crazy to a lot of the older guys, but im 98% sure shes wife material. Good girls are hard to find these days lol

3. We kind of feel like its best to rent first. Neither of us have lived on our own and the extra costs and emergencies that come with a house arent something im sure were ready for at this point. She just got a half decent job and in a year or two she should be doing a lot better for herself. Id love to buy and know it would be smart in a way, but its risky. Plus its hard to find something in a nice area for an affordable price around here.

Fam, we're pretty much the same age (turned 24 in Dec) and it sounds crazy to me . If y'all haven't lived together yet, you do not know if she is wife material yet. Period. I've been with my girl for nearly 4 years now, been living together for 2. I learned more about her in the first 6 months of us living together than the first 2 years of us dating. It will be an eye opening experience, especially since this is the first time both of you have lived independently. You may even grow to like it. But you should NOT be planning for her to be a permanent fixture at this stage.

Thats my bad . Definitely go for a nice apartment or rental property and continue on the path to success, my friend.

Make sure you get ample space with separate areas. Might even want to think about a 6 month lease over a 12 month for the first go round. Good luck!

I almost made the mistake of opening a whole life insurance plan paying $350/mo as an investment strategy because my dad told me it was the best way to go.

My now former financial advisor refused to work with me any longer because I declined a permanent life insurance policy as the best way to rebuild my savings. At 20 I told him that I wanted to buy a house at 25. That was my primary reason for asking him for help in the first place. Back then I was thinking about a roth IRA, me told me mutual funds would probably be a better bet. He also made a big deal about being underinsured, but I didn't really care at the time. He got me to get a term life policy and disability insurance, but I stopped paying on it pretty quick because I was broke and in college. He understood at the time.

Spoiler: Warning: Spoiler!

Wound up with a house at 23. I told him my biggest goals were rebuilding a savings since I spent a lot of it on house stuff, and paying of the mortgage quickly. The first thing he says is that I should get a permanent life insurance policy. Right away it doesn't sound right, but he's telling me how it'll be safe in case something happens and I no longer can pay the mortgage. I say it sounds cool and tell him I'll think about it. I have title insurance and mortgage insurance, so that stuff is taken care of in the event that I no longer can. He knows this, but still makes a big deal about me getting the insurance for other reasons.

I told him I still wasn't sure on it, but I'd be open to it after everything else is figured out. He says cool, drafts up the policy, orders a visit so they can check my vitals, etc. Meanwhile I search all of the reasons why its a bad idea, and make up my mind not to accept the policy.

The premium comes back and its more than the quote. I tell him I'm good on it on the strength that the quote didn't match. He gets mad, tells me that another $5 shouldn't be a big deal, and he asks me why I wouldn't accept. I tell him the premium is higher than expected and its not really something I wanted in the first place. He starts telling me how its a good fit, and then I cite specific examples from the stuff I read as to why it wasn't a good idea. I swear I could hear his blood vessels constrict over the phone. He goes from kinda mad to PISSED. Tells me that he feels a lack of trust, and says how much work he had to do in order to draft the insurance policy. I tell him I'd be open for other ideas and just not that one, for specific reasons, and then he drops this gem: "Well, if you're going to work with us and then spend your time on little ******** blogs on the web that don't have your best interests in mind, then we should probably stop working together." I think it was the first time he ever got laughed at in response to that threat, because his tone shifted from angry to apologetic when I told him that its no big deal and that I understood.

Cliffs: Even the people you played sports with, went to school with, etc might try something shady with you. Check, double check, triple check, and get someone to check your checks.

 

[capital sb]

 
Ok so you wouldn't recommend this route for non married people

I would still recommend the accumulation strategies, but it will be pretty much impossible to pay minimal to no taxes as a single filer.

No matter which strategy you choose. Also, you won't be withdrawing money for a minimum of 15 years, you may be married by then unless you don't plan to marry.

 

[capital sb]

@Yeah those plans are EXTREMELY shady and misleading, they are 100% for the benefit of the salesman. They make something like 40% on each plan they sell, it is ridiculous. My dad was pitched the idea by his "friend" just getting into the insurance business, suckered my dad into paying like $800/paycheck.

Of course his friend told him to pitch it to me lol, my dad straight up told me" Don't do any research online they will tell you it is not a good investment idea"

The returns aren't guaranteed like they say, and you cannot withdraw more than what you put into the policy tax free.

Its pretty crazy, because when I was looking into getting a plan with mass mutual because they had the best "returns". A "financial advisor" contacted me and continued to tell me that this was my best option for long term investments and I needed to refer my friends to him lol. I stopped answering his calls, I now do not need any type of personal financial advisor after all of the research I have done on finances/investments.

 

[mtchap]

I have a safety net saved, and a retirement account that I'm contributing to every month.

I feel like I have all the vanilla stuff covered and want to move into more aggressive short term stuff. Any recommendations or reading material?

 

[crcballer55]

Whole life policies are some of the worst investments out there. It's no wonder so many financial planners push them so hard when the commission is about 4x what an equivalent Term policy is. Plus, you'll easily be paying 8-10x less for the same Term coverage.

The worst part is you pay all those extra premiums and they only pay the face value at death and keep the built up cash value.

 

[capital sb]

Just refinanced my auto loan down to 2.29% after being lied to and finessed at the dealership where I got my car from, feels good

.

 

[still itachi]

 
Whole life policies are some of the worst investments out there. It's no wonder so many financial planners push them so hard when the commission is about 4x what an equivalent Term policy is. Plus, you'll easily be paying 8-10x less for the same Term coverage.

The worst part is you pay all those extra premiums and they only pay the face value at death and keep the built up cash value.

I think oftentimes, agents are able to foist whole life policies on the uninformed because they sell them on the idea of it as an insurance policy + investment vehicle. To be honest, the latter part of that I don't really understand how it works, but I'm sure it sounds alluring to people who are leery of tossing money away if they get to the end of a term policy and haven't used it.

I mean, its obviously backwards thinking--you don't get mad for paying for car insurance if you don't get into a crash, right?!--but I know that's how a lot of people see it, which is why whole life tempts them.

 

[crcballer55]

 

 
Whole life policies are some of the worst investments out there. It's no wonder so many financial planners push them so hard when the commission is about 4x what an equivalent Term policy is. Plus, you'll easily be paying 8-10x less for the same Term coverage.

The worst part is you pay all those extra premiums and they only pay the face value at death and keep the built up cash value.

I think oftentimes, agents are able to foist whole life policies on the uninformed because they sell them on the idea of it as an insurance policy + investment vehicle. To be honest, the latter part of that I don't really understand how it works, but I'm sure it sounds alluring to people who are leery of tossing money away if they get to the end of a term policy and haven't used it.

I mean, its obviously backwards thinking--you don't get mad for paying for car insurance if you don't get into a crash, right?!--but I know that's how a lot of people see it, which is why whole life tempts them.

The allure to most people is that they can be insured for the duration of their life too. In fact, a life insurance policy should be thought of as financial protection until you're financially able to support your obligations yourself. For example, if you die, is your spouse able to pay the bills without your paycheck? The worst thing if you were to die is for them to also lose the house too on top of the grieving process. Not to mention that the investment returns on those insurance vehicles are atrocious too. The companies just invest the money in a mutual fund with a long track record and pay you some fraction of the expected returns should you wish to cash it out some day. The reason they're able to pitch them as "tax free investments" is because the chances of you keeping it long enough to get a return greater than what you've put in is pretty slim thus nullifying any taxable net returns.

 

[HankHill]

Dedicating 2016 to paying off debts as well. Got a nice bonus from work at the end of the year, found a loophole hole for my cash back rewards on CC, and won in two of my fantasy football leagues lol.

Getting rid of a student loan this month. I'll still have about 19k left on some fed loans that I'm throwing $600-$700 a month on. Should be able to knock it out at this pace by 2018 if not earlier. If I end up buying a home at end of this year or early next year, I'll scale back on those payments.

I also should be knocking out CC debt this year as well. I usually don't have any outside of my budget payments I charge to it, but a car accident and unrelated medical expenses came up within the same month that forced me to open one with 0% apr.

 

[capital sb]

That's not how they push whole life. They push it as mainly an investment vehicle and the life insurance as an after thought really. The investment part is what you pay into to the policy and after paying for 15-20 years you will start to get a monthly payout from the insurance. They tell you whole life insurance is good because you will need insurance when you get older and if your insurance is already paid for at a younger age you won't pay anything for insurance when you are older.

It also isn't tax free, because you can only pull out what you paid into the policy tax free, everything after that will be taxed at your marginal rate.

 

[dathbgboy]

Yea, I have a whole life policy for now just in case. Once I get to a certain point financially, I'm getting rid of it. The investment portion is crap so I there's no interest there, I just don't want my family strapped for cash in the event of my untimely demise. I had a term policy but felt like it would be better to at least build something on this whole life.

 

[crcballer55]

 
That's not how they push whole life. They push it as mainly an investment vehicle and the life insurance as an after thought really. The investment part is what you pay into to the policy and after paying for 15-20 years you will start to get a monthly payout from the insurance. They tell you whole life insurance is good because you will need insurance when you get older and if your insurance is already paid for at a younger age you won't pay anything for insurance when you are older.

It also isn't tax free, because you can only pull out what you paid into the policy tax free, everything after that will be taxed at your marginal rate.

I remember we were looking at retirement accounts through my wife's work and the "advisor" kept pitching us on getting an annuity that couldn't go down in value. I was relatively familiar with them at that point and my wife was stoked that we wouldn't lose any money (since it was around 2009-2010 after our investments tanked). The guy kept saying "you'll earn UP TO 6% on your money" and I'm thinking, "the market has AVERAGED 10% over its history". I couldn't throw that guy out of our house fast enough. Only after we threatened to pull our business did he tell us about the mutual fund options. Bottom line, do insurance through insurance vehicles and investments in investment vehicles. There's a higher price to pay by combining the two.

 

[capital sb]

 
I remember we were looking at retirement accounts through my wife's work and the "advisor" kept pitching us on getting an annuity that couldn't go down in value. I was relatively familiar with them at that point and my wife was stoked that we wouldn't lose any money (since it was around 2009-2010 after our investments tanked). The guy kept saying "you'll earn UP TO 6% on your money" and I'm thinking, "the market has AVERAGED 10% over its history". I couldn't throw that guy out of our house fast enough. Only after we threatened to pull our business did he tell us about the mutual fund options. Bottom line, do insurance through insurance vehicles and investments in investment vehicles. There's a higher price to pay by combining the two.

Couldn't agree more, I kept looking at the payout breakdown and the returns were terrible. Not sure why my dad bought into it.

His "friend" kept telling me, okay you don't want to pay $300/mo well we can drop it down so its only $150/mo

. He wanted that sell very bad, I wasn't budging.

 

[stay lurkin]

I need some insight on paying off bad-debt.

When your account is written off and sold to a collection company can you typically negotiate/settle for lower than you owe?

 

[itshlittt]

I need some insight on paying off bad-debt.

When your account is written off and sold to a collection company can you typically negotiate/settle for lower than you owe?

yes or you can set up a payment plan but make sure you get in writing that the account will be removed from the credit bureaus

 

[capital sb]

I need some insight on paying off bad-debt.

When your account is written off and sold to a collection company can you typically negotiate/settle for lower than you owe?

I recommend you asking if they will allow you to "pay for delete". Come to an agreed settlement with the company, then pay them to remove the collections from your account. Not all collection agencies will put it in writing. Try to record the conversation if they won't put it in writing.

 

[itshlittt]

Just refinanced my auto loan down to 2.29% after being lied to and finessed at the dealership where I got my car from, feels good .

can you elaborate more on this refinance process.

did the life of the loan extend?

 

[stay lurkin]

I recommend you asking if they will allow you to "pay for delete". Come to an agreed settlement with the company, then pay them to remove the collections from your account. Not all collection agencies will put it in writing. Try to record the conversation if they won't put it in writing.

My goal was to do something like this. Try my best to get it in writing (email etc.) going over the specifics before I paid anything. And keeping it all in a folder in case they try to hit me with the cheese.

 

[stay lurkin]

Cause I have heard that these companies are SKETCHY