Madison MoneySports - Personal Finance Thread

[Evan]

I have both.  Slowly moving all my stuff that is actively managed to doing it myself.  The returns are decent, but by the time you pay somoene it really hurts your bottom line. Doing it myself usually beats them, but I have only been doing it myself for the past 5 years.

This is where my head is at. Given my current asset size they are looking at a 1.7% fee/year to manage the money. This is on top of what the funds themselves already charge (which are low, thx Vanguard). This is where I'm racking my brain about can I really make up an extra couple of % points with an adviser/manager vs my current "set it & forget it" mentality with target date funds?

Historically,  actively managed funds do not outperform index funds.  (and many underperform by a lot)    
Due to the effects of compound interest that financial planner is affecting your long term wealth in the scale of hundreds of thousands of dollars.   1.7% is fuckin' bonkers btw,  most charge around 1%
This relates to my personal opinion that most professions that take pay in percentages is a scam profession,  but that's another topic.  

IMO two good options without having to spend lots of time researching etc are:

• Wealthfront/Betterment/Roboadvisors:   Easy button.  Kind of like an actively managed fund by an algorithm.  Much lower fees  (~.25%),  but still fees so the above applies, just a lot less.  
  

• DIY with vanguard funds:  lowest fees but you should put some time into what funds to buy to make sure you are diversified properly.  Target date funds are also pretty good,  just check the fees.   
  

[WRXtranceformed]

I echo what Chris said about tax implications, most folks have no plan to consider their tax situation when they retire. There are also some extremely good financial products that a layperson "doing it themself" can't get access to without a licensed advisor. I'd have a FA even if I didn't have a family member that's an excellent one. I've got robo index funds too, they all perform fine when the market is doing well.

I'd also point out that nearly every wealthy person / family I know have some type of managed assets, and most everyone else I know who's not either "does it themself" or has no plan at all other than a company 401k.

---

I have both.  Slowly moving all my stuff that is actively managed to doing it myself.  The returns are decent, but by the time you pay somoene it really hurts your bottom line. Doing it myself usually beats them, but I have only been doing it myself for the past 5 years.

This is where my head is at. Given my current asset size they are looking at a 1.7% fee/year to manage the money. This is on top of what the funds themselves already charge (which are low, thx Vanguard). This is where I'm racking my brain about can I really make up an extra couple of % points with an adviser/manager vs my current "set it & forget it" mentality with target date funds?

Historically,  actively managed funds do not outperform index funds.  (and many underperform by a lot)    
Due to the effects of compound interest that financial planner is affecting your long term wealth in the scale of hundreds of thousands of dollars.   1.7% is fuckin' bonkers btw,  most charge around 1%
This relates to my personal opinion that most professions that take pay in percentages is a scam profession,  but that's another topic.  

IMO two good options without having to spend lots of time researching etc are:

• Wealthfront/Betterment/Roboadvisors:   Easy button.  Kind of like an actively managed fund by an algorithm.  Much lower fees  (~.25%),  but still fees so the above applies, just a lot less.  
  

• DIY with vanguard funds:  lowest fees but you should put some time into what funds to buy to make sure you are diversified properly.  Target date funds are also pretty good,  just check the fees.   
  

Not all advisors charge a continual % on total assets. Just thought I would point that out

[Senor_Taylor]

I've been working on reducing monthly costs and things that I have and don't use. This is both a finance and wellness thing.

Donated about half of my closet that didn't fit or I didn't wear so I can work on getting decent clothes for once. Selling my video game consoles, parts I have lying around, random things that I don't use. Tossing what I don't want to sell. Really trying to minimize things.

My insurance came out to be $300 for 3 cars last month, so I did some shopping and now I have it down to $90 a month with Geico for the track car and the truck. Paid off my phone, dropped my plan and took off insurance and dropped my phone bill from $130 to $60 a month. Cancelled Netflix a while back and I'm in the process of trying to find where I'm also spending money without realizing. Fast food is probably the biggest.

[JPolen01]

That's good stuff Taylor. We have been doing the same thing lately. Trying to reduce some monthly costs before the baby comes. We got both FiOS and VZW to lower our bills with just calling and telling them so. Takes some time on the phone, but it can be done.

Eating out definitely adds up. I was only eating out lunch during the week twice, but since cut that back to only 1 day a week. Meal prepping sucks but it saves a good bit of money.

[Senor_Taylor]

I went to check lowering our gigabit internet plan since we realistically only get 200 mbps at best. All of the lower plans are the same price with no explanation. May give them a call when I get a chance and see what they can do. We split it three ways so saving half on our bill would only save us like $12 each, but it adds up for sure.

[Jake]

Awesome, Taylor. I did the same thing when I moved to Arlington and it felt really freeing. I was so sick of having monthly recurring expenses, especially for things like my phone. Bought my current iPhone in cash and switched from AT&T to Sprint (thx Joey) to cut my monthly bill by nearly $100/mo.

I do still eat out a lot for lunches, but I figure $8-10 a day isn't all bad if I want to get out of the office and have an hour to myself. Have been doing a better job of meal prepping to have dinners at home (or basically, just eat out once a day/every couple days).

[Sijray21]

eating at restaurants (especially at places that have a tip) was a big budget breaker for me. making meals at home is fun and you know what's in your meal and how it's prepared is a nice touch on top of the typical cost savings.

getting rid of stuff was really rewarding and most of that happened for me each time i moved. I moved 7 times in my first 6 years after college, so i got rid of a LOT of stuff each time. I still need to go through the house and get rid of a lot of stuff, but with the new SALT provisions donations don't nearly help me like they used to come tax time. I'll still be donating stuff, but now i'm tempted to not itemize them (who am i kidding, i'll probably still do it).

[Kaan]

eating at restaurants (especially at places that have a tip) was a big budget breaker for me. making meals at home is fun and you know what's in your meal and how it's prepared is a nice touch on top of the typical cost savings.

getting rid of stuff was really rewarding and most of that happened for me each time i moved. I moved 7 times in my first 6 years after college, so i got rid of a LOT of stuff each time. I still need to go through the house and get rid of a lot of stuff, but with the new SALT provisions donations don't nearly help me like they used to come tax time. I'll still be donating stuff, but now i'm tempted to not itemize them (who am i kidding, i'll probably still do it).

we average about $4/each per meal at home... almost all local market/organic veggies, meat, etc.

my lunches are $2.00 at work... 1 chicken breast and 1 steamer bag of veggies. add 1 cent for my hot sauce use sometimes.

All my coworkers eat out EVERY day... and ask me how I can afford a race car.

[Apoc]

I was spending $1000 a year for parking and probably another $2500 on breakfast/lunch before I changed jobs. I'd pay it again because they were quality of life things, but that nickel and dime shit is easy to ignore. I had a good run of meal prepping before the kid was born and my math worked out to about $6/meal when it's homemade (note I was also cooking paleo so no cheap fillers). We eat home cooked dinners roughly five nights a week, which is a nice benefit of my wife staying home.

[V1GiLaNtE]

I've been working on reducing monthly costs and things that I have and don't use. This is both a finance and wellness thing.

Donated about half of my closet that didn't fit or I didn't wear so I can work on getting decent clothes for once. Selling my video game consoles, parts I have lying around, random things that I don't use. Tossing what I don't want to sell. Really trying to minimize things.

My insurance came out to be $300 for 3 cars last month, so I did some shopping and now I have it down to $90 a month with Geico for the track car and the truck. Paid off my phone, dropped my plan and took off insurance and dropped my phone bill from $130 to $60 a month. Cancelled Netflix a while back and I'm in the process of trying to find where I'm also spending money without realizing. Fast food is probably the biggest.

Good for you! You've probably found how freeing it is to offload "stuff". I've been working through minimizing my things for the last 7 years or so. Continuously curating my possessions and selling or donating things I never used or probably won't ever use. It really forces you to be honest and real with yourself and not emotional/sentimental about things. Like I used to have a box full of random computer cables because I told myself "I might need these one day" when in reality they had been traveling with me since college. Time to go!

I was tracking my spending for a long time utilizing a spreadsheet, but recently just downloaded the app "Every Dollar". I'm curious to see if that will be a better system for me. You're headed in the right direction figuring out where your money is going. This will help you long term to reduce your spending.

I went sober for the month of April knowing that I was spending like $200/month on booze and wanted to challenge myself both from the financial POV and wellness POV. Having wrapped up that challenge I'm definitely going to dramatically reduce my alcohol consumption and maintain a more mindful approach to drinking. I got to save more money and not feel like ass.

My challenge for May is to allow myself 1 "non-essential" purchase at a dollar cap of $50. For example an upgrade for the 4Runner, a new book, any sort of gadgety item, etc.  Basically forcing myself to really evaluate something and my need/desire for it. Can I do with out it? 

Check out /r/personalfinance for some great reading!

[Sijray21]

I was tracking my spending for a long time utilizing a spreadsheet, but recently just downloaded the app "Every Dollar". I'm curious to see if that will be a better system for me. You're headed in the right direction figuring out where your money is going. This will help you long term to reduce your spending.

I went sober for the month of April knowing that I was spending like $200/month on booze and wanted to challenge myself both from the financial POV and wellness POV. Having wrapped up that challenge I'm definitely going to dramatically reduce my alcohol consumption and maintain a more mindful approach to drinking. I got to save more money and not feel like ass.

i tried the "Every Dollar" app, but i didn't like it too much. I use Mint and i enjoy that app (although it requires you linking your accounts - some people don't like that idea). It's super easy to adjust vendor names and assign transactions to certain custom categories. The real-time data is really nice to have when you have accounts spread across everywhere, especially for a free app.

[Apoc]

+1 for Mint

I don't categorize every transaction, but I do use it to keep an eye on spending habits and watch the direction my investment/retirement accounts are going.

[WRXtranceformed]

Protip: Owning only 1 car saves you a ton of money. A friend of mine asked me if I missed having two cars the other day and I said no way
Protip 2: Diversify into Rolex sport models, specifically Submariners, GMT II and Daytonas. Get vintage if you can afford it. You'll thank me in 20 years when they outperform your portfolio

[Apoc]

Protip:  Owning only 1 car saves you a ton of money.  A friend of mine asked me if I missed having two cars the other day and I said no way
Protip 2:  Diversify into Rolex sport models, specifically Submariners, GMT II and Daytonas.  Get vintage if you can afford it.  You'll thank me in 20 years when they outperform your portfolio

Protip 3: Not having a kid saves you a fuckton of money.

[Sijray21]

Protip 3: Not having a kid saves you a fuckton of money.

+juan

[WRXtranceformed]

Protip:  Owning only 1 car saves you a ton of money.  A friend of mine asked me if I missed having two cars the other day and I said no way
Protip 2:  Diversify into Rolex sport models, specifically Submariners, GMT II and Daytonas.  Get vintage if you can afford it.  You'll thank me in 20 years when they outperform your portfolio

Protip 3: Not having a kid saves you a fuckton of money.

https://www.usatoday.com/story/life/allt...559812002/

[.RJ]

I went through this same exercise when we moved to a bigger house because the mortgage was gonna be quite a bit more.

Went down to one car and got it paid off. Cancelled the gym membership - we used it regularly but felt like we could give it up and it was expensive. Shopped the internet rates and got verizon down to $40/mo. Shopped car/home insurance rates. We already didnt eat out very much. I think there were some other things we changed, but that was the bulk of it. Now if I could kick my habit of spending money on bicycles and old motorcycles....

[V1GiLaNtE]

+1 for Mint

I don't categorize every transaction, but I do use it to keep an eye on spending habits and watch the direction my investment/retirement accounts are going.

I'm paranoid. I don't like the idea of dropping all of my financial institution passwords into a single party platform. I also really hated Mints budgeting functionality.

[Apoc]

I'm paranoid. I don't like the idea of dropping all of my financial institution passwords into a single party platform.

You can't perform any transactions in Mint and with TFA on the accounts, it's a non-issue.

[V1GiLaNtE]

Protip:  Owning only 1 car saves you a ton of money.  A friend of mine asked me if I missed having two cars the other day and I said no way
Protip 2:  Diversify into Rolex sport models, specifically Submariners, GMT II and Daytonas.  Get vintage if you can afford it.  You'll thank me in 20 years when they outperform your portfolio

Protip 3: Not having a kid saves you a fuckton of money.

https://www.usatoday.com/story/life/allt...559812002/

Or - https://www.theguardian.com/environment/...r-children