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Is anyone here good at stock investments?

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UntilTheNDofTimE

UntilTheNDofTimE

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I currently contribute $3500 a year to my 401k that my employer matches 50% up to 6%. I also save around 50-55% of my take home income. Since i currently live very comfortably and am still perusing my career im trying to make smart money decisions for the future. Would i be better off pouring more money in my 401k or would i be better off investing in stocks that have been secure and pay dividends. Would be aiming more towards long term investments/bonds than stocks with high volatility. The 401k obviously has the benefits by lowering your taxable income but another market crash is inevitable over the next 45 years and you cant pull back those funds without paying penalties where you can sell stocks for a loss and claim that on your taxes.

Most experts will say to max out on your 401k as much as you can afford but with my current contributions my 401k will be
in good shape when i retire as it is. Would investing in stocks/bonds be a better option.
 
I would guess this is a lot like starting a thread asking if anyone is good at sports betting. You would get a lot more people claiming to be than really are.

At least that would be the case at SBR. Here, we do seem to have people who really are good at picking sports. Maybe they know stocks as well.

I myself sure as hell don't know stocks. Good luck.
 
It is always best to max out the 401k because of the tax advantages. If you are worried about a crash within 45 years, reallocate a portion of your 401k into 0 risk or low risk options such as long term bonds and CD's. Instead of putting 50% into savings, put some of it into mutual funds and stocks not associated with your 401k that you can access within a shorter time frame. 8-10 years. Ideally, you should have a short term savings (cash) enough to live 6-12 months should you lose your income stream. A mid range investment that is a lttle more risky that yields a higher return and then the rest in your retirement. There is no magic formula because your risk tolerance is going to dictate how you want your portfolio allocated. You really need to setup an appointment with your company's financial advisor and they will map it all out for you.
 
I want to add: good for you, thinking about this stuff. You don't want to end up like me, pushing 50 with nothing in place.

So many young people are like the younger Mudcat and figure they'll worry about that stuff later. Then suddenly - BOOM! - they are pushing 50.

Smart on your part.
 
We need someone actually qualified at math to weigh in, but I'm pretty sure you're better off maxing out the 401k since your employer is contributing. The compound effect over several decades is worth a shitload of money.

My current employer matches 200% up to 5%. Thank you labour shortage.
 
I think with your age and position in life you should grab a 401k. Watching the market is never easy and I'm not very good at it.

With that said I put all of my high school earnings into a brokerage and have quadrupled it in 11 years. I'm calling that luck more than skill. It's also a high risk road because I could very lose it all, but that is okay with me being I'm young.

You can even pick mutual funds that will do what you are describing above. They decide when you want the money and how to allocate it to meet your goals for the year the capital is at in it's maturing process.

Good Luck on your choice and keep asking questions.
 
Matty
We need someone actually qualified at math to weigh in, but I'm pretty sure you're better off maxing out the 401k since your employer is contributing. The compound effect over several decades is worth a shitload of money.

My current employer matches 200% up to 5%. Thank you labour shortage.
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This. Max the 401k up to match bonus. It's free money and it reduces your pretax income. Then, your specific situation will dictate. Every dollar you put into the 401k after this will save $1 x your marginal tax rate, however those dollars are more or less illiquid whereas dollars saved outside the 401k in a savings account or individual brokerage account are taxed but are completely liquid.

It sounds to me that if you are saving 50% of your take home AFTER the 401k contributions you could stand to up the total 401k investment. If you are worried about liquidity and want something in between the deductibility of a 401k and full liquidity consider an IRA or RothIRA. While you pay tax penalties on pre-retirement withdrawals they are more liquid than 401k's b/c there are certain pre-retirement withdrawals that are excepted, the most notable being a first time home purchase and certain education expenses.

The important thing is to max that employer bonus, a no-brainer. And muddy is right, kudos for thinking of this now.
 
I think he's already maxing out the bonus, maybe even contributing more. I'm doing the same thing - I only need to put in 2.5% to get the 5% bonus, but I put in 5% regardless. Not 100% sure this is the best way to go, but I'm pretty sure it's not a bad idea.
 
Sorry all this assumes your tax home is in the US. I think you might not be. Regardless you need to balance (or consider) how much you need to feel safe and keep that liquid (including stocks & bonds). The rest should go into retirement. The hardest part of this is defining your own risk profile, but again its a great "problem" to have.
 
Matty
I think he's already maxing out the bonus, maybe even contributing more. I'm doing the same thing - I only need to put in 2.5% to get the 5% bonus, but I put in 5% regardless. Not 100% sure this is the best way to go, but I'm pretty sure it's not a bad idea.
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It's a great idea. I'm not sure about Canadian tax implications of 401k investing but even past the match bonus you get the "tax-treatment bonus," a pre-tax deduction.
 
Matty
We need someone actually qualified at math to weigh in, but I'm pretty sure you're better off maxing out the 401k since your employer is contributing. The compound effect over several decades is worth a shitload of money.

My current employer matches 200% up to 5%. Thank you labour shortage.
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Wow i need to work for a company like that. Id contribute The maximum which would yield you 50,000 a year in your 401k, you'd be rich in 20 years.
 
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