Today we’re all about your letters. We’ll start with a question about moving funds around to avoid some taxes, jump into helping a 25 year old decide whether to max out his retirement accounts, answer a question about robo advisors, and then launch into helping kids with money, how to save for a house, and more.
In our headlines segment we’ll talk to Joe Jiminez from The Alternate Life podcast. Maybe you’ve had the urge to quit your day job and go on a journey, but few of us have actually followed through. Joe Jiminez dumped the job and spent his summer walking the Continental Divide Trail. We might not be able to take the summer off ourselves, but we’ll at least ask Joe what it’s like.
Then later on, we’ll throw out the Haven Life Line to Reggie, who’s heard on the show that OG isn’t particularly fond of Betterment or Wealthfront. Reggie has a bulk of his money in Wealthfront and Betterment, so he’s wondering…what’s the issue?
As always, we’ll still save some time for Doug’s trivia…which today is exceptionally epic.
Thanks to Proper Cloth for supporting Stacking Benjamins. Get $20 off your first custom shirt at Propercloth.com/sb.
Show Notes:
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Proper Cloth
Thanks to Proper Cloth for supporting Stacking Benjamins. Get $20 off your first custom shirt at Propercloth.com/sb.
<2:59> Headlines
- Sales of unregistered securities are a growing problem that’s harming investors — and the industry (Investment News)
- We’re sending a HUGE thanks to Joe Jiminez for stopping by the basement to tell his story. You can hear more from Joe in his podcast: Taking the Alternate
<25:33> Your Letters
We’re putting you in the hot seat today. Our featured guest? YOU and your letters. Take a look at the letters we’ll be covering on today’s show:
Al:
My wife is in the final 4-8 months of her life as she battles metastatic cancer. We have our taxable assets not held jointly but in separate accounts, partly so that we could set up Transfer On Death (TOD) directions independently. She has her taxable assets going to our three children. In looking over each of our assets, I did some shuffling of the holdings (maintaining same value) so that assets with the greatest capital gains were moved to her name in order to have the children benefit from the stepped up basis (and done with her permission). This seemed to makes sense to me. Any downside to this? Thanks.
Daniel
I am a 25 year old with a full time job making roughly $80,000 before taxes. I have been very good about saving for the future and have a much larger amount saved than many of my peers I believe.
I have maxed out my 401(k) (roughly $38,000 saved) for the last two years along with my Roth IRA for the last 4 years (roughly $27,000 saved) and have a brokerage account with about $30,000 invested in it. I am looking to buy my first home.
However the city I live in has a very high cost of living so I’m looking at a condo or townhome for roughly $250,000. I have about $20,000 saved between other accounts to put as a down payment. I am also hoping to rent out the second bedroom to help pay for the mortgage and help accelerate my payments. I have no other debts or loans.
I’m wondering what you think I should do with my retirement accounts. Should I continue maxing them out? Should I stop contributing to put all my money towards my mortgage to begin paying down the principal and save money on the interest? My employer has a 6% match for the 401(k). Any help or suggestions is appreciated! Big fan on the show!
Lisa
Hi Joe & OG – My husband and I are both contributing 15% to our respective 401ks. Mine gets matched at 6% but my husband has no company match. We were told by a financial advisor that my husband shouldn’t contribute to his 401K since he gets no match and I should only contribute 6% to get my match.
Instead, we were told to open a personal investment account with either a roboadvisor or use a target date account at Fidelity, Vanguard or the like and put our money there. I’m not sure we agree with this strategy and want to get your feedback on these recommendations.
Isn’t it better to have the money grow tax free right now? Our income level doesn’t allow us to contribute to a Roth, although my company does offer a Roth 401k in addition to my the standard 401k. We’ll be 51 this year. I’m a fairly new listener so not sure if you’ve covered these topics before and appreciate any info you can to share. Thank you!
Alex
Hey Joe and OG, my wife and I just found out we’re expecting! This is something we’ve been planning for so I’ve had a long list of financial to-dos ready for this moment. I’m hoping you can help me figure out if all of these things are necessary as I’ve gathered them from multiple sources over the years.
The list I have is:
increase our life insurance (currently 2 years),
purchase long term disability insurance,
purchase umbrella insurance,
set up 529,
set up recoverable living trust,
set up will,
set up durable power of attorney for finances,
set up durable power of attorney for healthcare.
Background about us: we are in our late 20’s, both make over $100k, max out our 401ks, have a 6 month emergency fund all set and currently have $25k starting to get saved for a house that we’re hoping to buy in 2021. For what it’s worth I did actually learn something from this show once, I realize lightning doesn’t often strike twice but here goes nothing. Thank you!
Skippy
I want to teach my kids (ages 8 and 10) how to invest and the power of compound interest. Ideally, I’d open Vanguard accounts for both and have them buy ETFs with birthday/Christmas money. But I’m scared that this will negatively affect how they qualify for financial aid for college.
What should I do?
<49:38> Doug’s Trivia
- Which US bank is the largest?
<53:47> Haven Life Line
- Reggie has a bulk of his money in Betterment and Wealthfront. He’s heard on the show that OG doesn’t really like Betterment. What’s not to like about it? Should Reggie move his money?
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