Quote :

"but what is the point of a company offering a 401k plan, if they do not contribute to it?"

maybe they're paying the management fee for you?

3/21/2014 12:50:25 PM

It's just another benefit, like healthcare or vacation time.

3/21/2014 2:07:07 PM

4% x salary for additional company 401k contribution for 2013 on top of the match. I hope they keep this up for a long time. This is what they switched to once they did away with pensions a few years back.

3/24/2014 1:15:59 PM

Bought my first note from lending club for $20 and xferred another $60 in today.
Kind of annoying that it takes a week to process.
May throw my tax refund in there or just buy come KO.

4/3/2014 8:28:28 PM

I've never used it, but considered it in the past. What made you try it?

4/4/2014 5:59:43 PM

Quote :

" I guess I don't know as much about 401ks as I should... but what is the point of a company offering a 401k plan, if they do not contribute to it? "

$17,500 contribution limit on the 401k, versus $5500 for IRA vehicles. Essentially, it gives you the flexibility to shelter more money from taxes than would be available without the 401k offering. There are other perks: fund offerings may be available that are unavailable to IRA accounts, automatic deductions from your paycheck, paycheck deductions automatically adjust your withholding, contributions get automatically invested, etc.

Of course there are draw backs, but a 401k offering with no matching isnt completely pointless.

(And because you cant just open one as you see fit)

4/5/2014 12:42:32 AM

Quote :

"I've never used it, but considered it in the past. What made you try it?"

I've been debating trying it for over a year.
Got kind of turned off by prosper several years ago.
Stumbled onto this blog last week and decided to give it a shot.

http://www.mrmoneymustache.com/

4/7/2014 9:39:50 AM

My wife and I really just need to get into rental properties. So many of my friends have done it in our area and I just haven't dove in yet. Most of them are buying properties that are fixer-uppers near our downtown and have gotten some great deals.

In some cases they have gotten houses where all-in they were out <$100,000 and are getting $800-$1000 in rent. Yes, the houses are crap and some of the tenants are borderline sketch but they have consistently gotten rental income and had very few headaches from a maintenance standpoint. The land itself in these areas in 5-10 years will be worth it for a tear-down probably (some of them plan to tear these down and build in that time-frame).

Anyway, this is in the investing/planning for retirement thread because I think we really need to diversify and create some more "passive income". We've kind of reached the end of my "by 30" plan in regards to: paying off student loans, maxing Roths, maxing 401ks, investing after-tax dollars into Roth up to a certain amount based on retiring at 55, but all of that is entirely dependent on a historical stock market. Instead of my strategy just being "increase the amount we're investing in our vanguard funds" (like it was this year) when our income goes up, I probably need to bite the bullet and try out a rental property.

[Edited on April 8, 2014 at 9:41 AM. Reason : ]

4/8/2014 9:36:56 AM

Do not use Farm Bureau Insurance to cover your rental properties. They cost me about $30,000 when a pipe burst and I had a sub-standard policy.

4/8/2014 10:13:34 AM

thanks for the heads up. That's one the reasons I've been hesitant: liability and potential headaches.

4/8/2014 10:24:15 AM

just opened a roth ira with vanguard. i've been contributing the minimum required to my company 401k to get the max employer matching, but i'd been needing to get a roth ira going to supplement that.

i ended up going with one of their target retirement funds. the minimum to start one of those is $1000 vs the $3000 to pick your own individual funds. In the long run, I'll end up paying a tad more in fees but it'll get rebalanced automatically over time to hit my target retirement date. The extra fees come out to ~$60-$100 per $100,000 each year or something like that. It's worth it to be able to just throw money into the fund and not worry about it anymore after that.

4/8/2014 11:18:19 AM

I, too, am looking to diversify.

I've got a good friend in the "buy a dump, fix it up, and rent it out" business. He does all the work himself...sometimes living in one part of a house while fixing up the other. He just bought a house down the street from me, turned it into a duplex (each unit is 2BR/2B), and is getting $3,200 in rental income with a $900 mortgage. He does about one of these a year and is up to 5 rental properties right now.

I told him I want in on his next spot. He's getting most of these run-downs for less than $100k...so the initial investment is pretty small. You just have to be able to float that mortgage while he's renovating. I think he's taking a break, so this will give me some time to get the scratch together to invest. The rental market around here is just absolutely ridiculous...and there are no signs of it slowing down. You only need two or three properties to make decent money.

The plan is to be sitting pretty in about 20 years with incomes from my regular job, basic financial investments (savings, roth IRA, etc), some rental properties, and a restaurant or two (first one should be open within the month).

That of course...is the best case scenario...I don't want to even think of what the worst case would be.

4/8/2014 11:45:48 AM

Quote :

"Do not use Farm Bureau Insurance to cover your rental properties. They cost me about $30,000 when a pipe burst and I had a sub-standard policy."

they won't even cover rentals any more...they either farm you our to a state run policy (which is crap, and what I suspect you had), or, if you have a good agent, will recommend you go somewhere else.

4/8/2014 11:55:27 AM

^^ yep. That's pretty much exactly what some of my friends have done. One of my architect friends already thinks she is going to quit soon because she has several rental properties already. Instead of working at a large corporation doing design for industrial facilities like we do, I think she is going to try and do some architectural design on her own (residential and commercial...stuff she is actually interested in and at her own pace) to supplement her rental incomes. Not a bad plan and I hope it works out for her.

4/8/2014 2:48:11 PM

Heh, lending club payment #1 hit yesterday

Adjusted Net Annualized Return 15.04%
Interest Received$0.23
Total Payments
(Principal & Interest) $1.74

About to hit up SECU for a 1K wire xfer later and have some real fun

4/15/2014 10:34:49 AM

Eugh, it didn't dawn on me that notes bought at a markup could potentially be prepaid :-/

4/30/2014 11:44:20 AM

^I had a lot bought back early a few weeks ago...I only bought them at a small premium tho, and got several interest payments out of it, so it still a net positive.

I have a few other lots that are trading at a premium from where I bought them, so it's tempting to sell, but those interest payments are just soooo nice

4/30/2014 12:08:34 PM

Any way to save my filter?

4/30/2014 12:15:42 PM

I bought a super risky combination of puts and apple stock. Will report back after earnings call for linked in tomorrow.

Still putting money in lending club in every month. Still making 11% adjusted.

4/30/2014 2:27:13 PM

How do you calculate your return when buying off the secondary market?

4/30/2014 3:11:32 PM

I don't understand the question. It just has my returning the UI @ lendingclub.com.

None of mine are yet failing or late.

[Edited on April 30, 2014 at 3:33 PM. Reason : A]

4/30/2014 3:27:58 PM

" the Adjusted NAR calculation is based on actual remaining principal of the Note and does not consider the price paid."

https://www.lendingclub.com/landing/about-nar-3.action

[Edited on April 30, 2014 at 3:38 PM. Reason : ]

4/30/2014 3:38:42 PM

Isn't that just if you buy them on FolioFN? I buy them at lendingclub.com.

4/30/2014 4:17:01 PM

Quote :

"when buying off the secondary market"

4/30/2014 5:12:18 PM

Quote :

"Anyone else try Future Advisor?"

actually, I am using it now. Rolled over my DB 401(k) into a traditional IRA with TD Ameritrade, was looking around online to see what's up, and Future Advisor came up as an option. I decided to give it a shot, since it integrates with TD Ameritrade. I've read some negatives from people saying that the model they use for re-balancing is overly simplistic. In the short time I've been using it I've already seen some pretty good returns, and I was impressed with the forecasting, but we'll see.

I'll report back in a while to let everyone know how my stuff is performing.

4/30/2014 10:02:25 PM

Cool. Thanks!

4/30/2014 11:05:03 PM

I tried it but it was pulling information in weirdly from some of my vanguard accounts (forget what the issue was) and it wouldn't connect properly at all with my wife's 401k nor mine (same company though).

5/1/2014 8:16:51 AM

I should clarify that I didn't put a ton of time into it though. I liked the idea and it seem to have some cool features that I liked at first, but after messing with it some, it was a little clunky and some of the moves just didn't make sense to me. It had me re-balancing way too much stuff to match their ideal but I feel fairly happy with the balance of my portfolio currently.

It would probably be better if they had some sort of tool (maybe they did but I didn't look) for new investors who haven't invested much yet. If I had a tool like this 7 years ago and told it how much I would be investing in 401k, Roth IRA, after tax, etc. and some of my goals and level of risk etc. it probably would have been a great tool if it tried to map out a recommendation for how I should invest going forward.

Within our Roths and our taxable accounts (outside of our 401ks) most of our investing is split up between 5 Vanguard Mutual Funds (4 index funds and 1 other fund mainly). All admiral funds where available so they are extremely low fee and relatively diversified, but it was recommending all kinds of moves for me with questionable benefit or multiple moves for fractions of a % predicted improvement over a long time.

[Edited on May 1, 2014 at 9:09 AM. Reason : ]

5/1/2014 9:04:34 AM

Quote :

"My wife and I really just need to get into rental properties...... Anyway, this is in the investing/planning for retirement thread because I think we really need to diversify and create some more "passive income". We've kind of reached the end of my "by 30" plan in regards to: paying off student loans, maxing Roths, maxing 401ks, investing after-tax dollars into Roth up to a certain amount based on retiring at 55, but all of that is entirely dependent on a historical stock market......."

This is exactly how I've felt and what I've been researching for the past couple of months. I'm 31, and realize I really need to start investing to find passive income streams instead of just working until I'm dead. I enjoy working, but I'd much rather be actually living a life and doing other things.

There are two strategies I've been thinking about.

#1 is FolioFN. Since NC does not allow you to invest directly in Prosper or LendingClub, I would need to purchase notes on the aftermarket that people don't want. It's a little more risky, but still seems to have decent gains if you do your research. NC will eventually come around and I should be able to get notes through the normal sites. This would be a way to play with some funds I just have sitting in a money market fund. You diversify over hundreds of notes to the point that you would see a 15-25% return even with a 2-3% default rate.

#2 Buy/Hold Rentals. This is where it's at. There is a ton of great information on the website http://www.biggerpockets.com/. They have a podcast (released episode 69, I'm on 19), a "beginners guide", huge forum community and information on every type of real estate investments. Including hard money lending, wholesaling, tax leins, flipping, buy/hold, REIT, etc. Because of my desire for it to be passive, I am willing to take less profit and hire a property management firm. Assuming you find a good one, they will find the tenants for you, do maintenance on the property, and take care of all the day to day. They are even collecting the rent check and after their percentage they put the rest in your account. Yes you can make more if you do it all yourself, but I am going to keep my full time job and do this on the side, so unless it explodes I'm not planning on quitting any time soon.

I'm going to be moving into a new house in the next year, so I want to get that out of the way before I move forward. I'll then have the rest of my credit line to get a few smaller mortgages and build up. From the research I've done a good rule is to try and get between $100-$200 profit per unit every month. That is the average amount taking into account vacancy, expenses, maintenance, PM, mortgage, etc. Some months will be higher, some will be lower.

My wife was a skeptic on the idea until she spoke with a friend of hers that is a commercial real estate broker and financial guy. She told him what I wanted to do, and said "that sounds great but don't most people wait until their 50s to start doing something like this?"

He said, "Yep, they sure do. And that's the problem. Everyone should start doing this in their 20s-30s so they have the potential for completely passive income by late 40s early 50s."

5/9/2014 9:41:18 AM

I have over $1000 in notes now, but I'm still a little confused how folio calculates the net annualized return. Anyone understand their logic here?

Adjusted Net Annualized Return 16.85%
Available Cash$7.41
In Funding Notes$0.00
Outstanding Principal$1,053.06
Account Value$1,060.47

Available Cash Detail
Deposits: $1,090.00
Investment:
(includes In Funding) ( $0.00 )
Principal Received: $63.40
Note Interest: $2.90
Late Fees Received: $0.00
Recoveries: $0.00
Collection Fees: ( $0.00 )
Service Charges: ( $0.64 )
Adjustments/Credits: $25.00
Withdrawals: ( $0.00 )
Pending Withdrawals: ( $0.00 )
Referral Bonus: $0.00
Note Trading Platform
Notes Bought: ( $1,148.28 )
Notes Sold: $0.00
Fees:
(as reported by FOLIOfn) ( $0.00 )
Pending Settlement: ( $24.97 )

5/9/2014 10:38:40 AM

T-dub advice needed...

I mentioned earlier in this thread about investing in some rental properties. It could be good or bad, but the opportunity has come up a lot sooner than I had planned. Basically I spent the weekend in Atlanta with one of my wife's high school friends and her husband. He's a pretty well-off financial planner and we threw some ideas back and forth...and we basically ended the weekend with us agreeing to partner up on investment properties in Charleston.

This is pretty much exactly what I've been wanting to do...well, technically I was looking at two options, but this one easily comes with less headache/risk (IMO). The first one would have been partnering up with a good friend who is a general contractor (and has about five or six of his own investment properties). We find dilapidated houses, I put down a majority of the down payment...we split the mortgage while he fixes up the place and then we find an equitable split of the rental income. This is what this guy does for a living, he just has different people he's partnered up with. The risk in that scenario for me is having to float the mortgage while he fixes up the house. I'm sure I could do it under certain circumstances...but it would freak me out if he started hitting delays.

The 2nd scenario would be to purchase already livable and rented out properties, continue to collect rental income, then sell for a later date as properties continue to appreciate (depreciation barely even hit this area during the recession) and house has continued to be paid off.

We're looking at several properties right now, but the one we're most interested in is a duplex with each unit being 3br/1.5ba. Properties around this house range from $600/room to $900/room. It's a standard college house that will probably get around $700/room. So we're looking at about $4,200 a month for the whole house. List price for the house is $310k, but my realtor thinks we can get them down to $290k, as its been sitting there for a while without any offers. We put 20% down and finance 232k at 4.75%...we're looking at a $1,210 mortgage. So we would be splitting almost $3,000/month.

Obviously there will be hidden fees, costs...possibly having a property management company handle everything. Either way, I would be ecstatic to be getting $1,200+ a month, hitting the ground running.

Here's my problem/question. I just put a small chunk of change down to open up a restaurant, so putting $30k into this house would pretty much vanquish my savings. I'd have my Roth IRA as my only backup. Good news is the restaurant is blowing up in its first week...but even if it maxes out every night (smaller place), I won't see $25k for at least 6 months.

If this house checks out...I think its a no-brainer. Even if it doesn't, we're looking at about 4 or 5 other properties that have similar specs. I really don't want to miss an opportunity like this and I want to develop a strong partnership with this guy. That being said, $30k won't break him like it would break me.

Is a Home Equity loan a good idea? I bought my house at $240k. Right now I owe a little less than $220k. I bought at the bottom of the recession and right now similar houses are going for around $310k and $320k in my neighborhood. Can I take just $30k? Isn't their a minimum you can take, and what normally is the minimum (I bank with BofA...mortgage with another company)? Do they follow the same terms as your mortgage? Because I've read that their are early payment/termination fees...but I'd rather not pay the interest on a $30k mortgage when I could probably pay it off much quicker.

I'm basically trying to avoid clearing out my savings. If this were done a year from now, I'd probably be fine...this unfortunately came at a time when I just made a major investment. I could probably float $15k myself and borrow another $15k. Would it be even worth it to do a home equity loan for that small amount? Do banks even do personal loans anymore?

I plan on going into my bank sometime this week to sit down and discuss my options, but would love some good feedback from the t-dub experts before I do that.


Additional information...

Downtown Charleston between the "neck" (where the peninsula ends and starts becoming North Charleston) and Upper King street is going through a ridiculous change right now. The projects that have already started and are planned for the next 3-5 years will completely change the landscape of the area I live in and where we're looking to invest...not to mention what's already been developed the last couple years. Rental rates have already been skyrocketing and house prices are starting to creep up as well. We think we have a 2-3 year window where the rates are low and we can affordably get a couple properties before the numbers are out of our reach.

5/13/2014 4:34:43 PM

Quote :

"#1 is FolioFN. Since NC does not allow you to invest directly in Prosper or LendingClub, I would need to purchase notes on the aftermarket that people don't want. It's a little more risky, but still seems to have decent gains if you do your research. NC will eventually come around and I should be able to get notes through the normal sites. This would be a way to play with some funds I just have sitting in a money market fund. You diversify over hundreds of notes to the point that you would see a 15-25% return even with a 2-3% default rate."

When do you think this would happen? It's a pain to have to research notes on Folio as oppose to lendingclub.

5/14/2014 6:47:48 AM

How so?

5/14/2014 9:05:42 AM

I'm pretty much solely relying on payment history and reason for loan with a few of them passed over for large recent drops in credit history. Just put another $500 in there this week.

5/16/2014 2:12:27 PM

^^^^

I expect that you'll need more equity than you have to take a home equity loan or HELOC.

5/16/2014 2:49:43 PM

Some feedback on FutureAdvisor premium, since I've been using it for a few months now.


I've had an average 5.3% return over the past 3 months. Some weeks have been better than others, of course, with the world being in the state it's in. I haven't been putting money into it actively since I rolled over my 401(k), but with the return I've been getting, I'm considering putting less into my current 401(k) (which doesn't have a company match) and more into my IRA (besides my yearly contribution) monthly.

I like this quite a bit better than other things I've seen, because it really is auto-balancing. All you have to do is put money into the account, watch it change automatically, and then see results. Not like your company 401(k) where you choose some funds and invariably see them perform poorly.

[Edited on July 29, 2014 at 5:54 PM. Reason : .]

7/29/2014 5:54:25 PM

Not sure why you're investing in your 401k with no match prior to maxing out your IRA.

I'm at 11.97% using foliofn
Of the 255 notes I've invested in, 3 are in grace period, 8 are paid off, and 1 is 16-30 days late however it appears as though lending club is on top of their shit.

7/28/14 (Monday) Lending Club attempted to contact borrower (message left)
7/25/14 (Friday) Attempted to contact borrower (no voicemail)
7/24/14 (Thursday) Attempted to contact borrower (left voicemail)
7/24/14 (Thursday) Borrower contacted Lending Club
7/23/14 (Wednesday) Attempted to contact borrower (left voicemail)
7/22/14 (Tuesday) Attempted to contact borrower (left voicemail)
7/21/14 (Monday) Attempted to contact borrower (left voicemail)
7/18/14 (Friday) Sent email to borrower
7/18/14 (Friday) Borrower contacted Lending Club

[Edited on July 29, 2014 at 7:57 PM. Reason : ]

7/29/2014 7:56:47 PM

I'm essentially doing double what my previous 401(k) contribution was at the last place in order to make up for the lack of employee match. The amount of savings is the same, just without the wait on vesting.

7/30/2014 8:16:57 AM

Why not max the IRA first?

7/30/2014 2:27:23 PM

No reason not to. Hence my thought on changing.

8/2/2014 7:37:03 PM

My dad won't get off my case about starting a Roth.

Who should I use?

8/3/2014 12:26:22 AM

Vanguard

8/3/2014 2:21:17 AM

I switched to Dodge and Cox two years ago and they've been great.

I had great results with American Funds as well...but they charged some fees I thought I could do without.

8/3/2014 10:49:44 AM

Yeah. I tend to go with Vanguard or Fidelity when possible due to their extremely low expense ratios.

8/3/2014 4:19:53 PM

^^^^WTF? You still don't have a Roth?

Shit, I might start riding your ass about it, too.

8/4/2014 7:31:05 PM

Yeah synapse, way to fail at life.

8/5/2014 10:29:18 AM

I started a Roth account right after college. The only thing I got out of the finance class was to start a Roth account. Professor pushed it hard. Now I have a lot more then the Roth but you gotta start somewhere.

8/25/2014 9:23:18 PM

Hey synapse,

You open that Roth account yet, motherfucker?

If not, hit me up on Facebook. The shit's not rocket surgery. Let's get this done.

8/26/2014 6:58:18 PM

Adjusted return for Lending Club has gone down to 8%. Been sticking some money in it most months and use that automated investing platform. Each time I get paid it just reinvests the money.

Options portfolio is down about 5%. Most of my wins aren't big enough to offset my losses. I practically lost 5% on purpose when I was just getting started. Hopefully earnings reports will move the few puts I have to make it up.

Anyone that is self employed have experience with setting up a 401K for yourself?

8/26/2014 7:45:12 PM

had my first note on LC issued today - we'll see how it goes

8/26/2014 8:54:28 PM