IRA's Vs. Mutual Funds

Flagpole Willy wrote:

kaitainen wrote:

you can only be pushed so far by this guy before you allow yourself to be bothered and you find yourself responding.

kaitainen, now, not only are you guilty of giving bad investing advice, but you're proven not to be a man of your word -- you've said several times you were going to stop responding, yet you can't.

FW - do you always have to be a pompous ass?

Flagpole Willy wrote:

Here's a real-world example. Let's say you open an IRA at age 19, and you put just $2,000 into it for 7 years for a total of $14,000 contributed. Then for whatever reason you stop contributing (by age 26). At age 55, you will have $193,940, FAR more than the $14,000 you put into it, and, if you take out $100,000 to help pay for a house or a couple of cars or whatever, you'll be dinged with a 10% penalty on $86,000 of that. Holy crap, who wants to do that? Of course, if you plan to use it the way that kaitainen says is "having your cake and eating it too" then not only would it never have gotten up to $194,940, but you would have taken out some of the $14,000 you contributed too, so you'll have next to nothing.

What the hell is wrong with you Flagpole? By using this far-fetched example, your debate skills have dropped down below the average of this message board.

No one in this thread is saying to do anything like what you've just posted. No one in this thread has said that the return on your contributions to the Roth IRA isn't subject to the 10% penalty.

Stop it!

malmo,

If you go back and read ALL of my posts in this thread, you see that several times I have agreed that you are not penalized on CONTRIBUTIONS -- I've NEVER disagreed with that. I didn't mention it initially because again, the MISTAKE I made was assuming that people would be keeping their money in that IRA for the long haul -- you do that for several years and then tak a chunk out before you're 59 1/2 and you'll get hit with a penalty. My issue with kaitainen is that he told me I was flat out WRONG, and that is not true. To be flat out wrong means that you are never dinged with a penalty, and again for the millionth time, the VAST MAJORITY OF THE TIME, a person who takes money from their IRA will be if they take it out early. Disagree all you want malmo, but what I've said is true, and not only is it true, but it is a better way to look at putting money into a retirement account.

Well then malmo everyone agrees with me then. As they should.

kaitainen wrote:

Flagpole Willy wrote:

You'd better be able to save $800,000 (like YOU said you could) with your "girlfriend" every two years and then hope she agrees to marry you and you two don't divorce.

i only brought up my personal finances because you constantly brag on this website about how smart you are with investing. my point is that i make so much more money than you, while living a similar or even more frugal lifestyle (why own a car at all?), that i've probably saved as much in a 2-year period as you have in 15 years (comparing apples to apples - savings, not savings + gains).

i never said $800,000.

Yes you did. I proved it mathematically earlier. If you are agreeing now (and I take this as that) that you will not have invested $800,000 in two years, then you simply don't know how to figure out how much money you will have when you're 60. No shame in that. Most don't know how to.

Flagpole Willy wrote:

kaitainen, now, not only are you guilty of giving bad investing advice, but you're proven not to be a man of your word -- you've said several times you were going to stop responding, yet you can't.

Stop the presses here. Willy, whatever your debate on the points here, you of all people are the last one who gets to criticize ANYONE else for not being a "man of his word".

Those who have been on this board for a few years lost count of the number of times you told us you were "leaving for good", only to reappear a few days, weeks or months later.

Flagpole Willy wrote:

Yes you did. I proved it mathematically earlier. If you are agreeing now (and I take this as that) that you will not have invested $800,000 in two years, then you simply don't know how to figure out how much money you will have when you're 60. No shame in that. Most don't know how to.

you're making a complete fool out of yourself at this point.

i just explained, in the passage you quoted, what my statement was based on. you twisted that by focusing instead on the fact that i also said my family would easily have $10 million in retirement savings at retirement. you apparently extrapolated that backwards to suggest that i meant we'd have $10 million solely on the basis of savings in 2006 and 2007, a completely absurd formulation.

it's okay that my girlfriend and i make 5 times what you make (while you provide for a wife and kids). it doesn't have to cause you to have a public breakdown on a message board. just relax.

Dude, you don't know what I make, so you can't say if you make 2 times or 4 times or 5 times or whatever. So sorry for you that your sense of self worth is obviously tied up into how much money you make. Making money is easy. Being happy is much more rewarding. No need to keep bringing up your "girlfriend". Marry her and then tell my how much the two of you make together.

you consistently brag about your savings prowess on this board. if you are to be believed, you've given many indications of what you make. i'm assuming that it's around $100k for this simple exercise.

and i just took a 50% pay cut (that's right, i'm going to make 1/2 of what i currently make) because i thought it would make me happier.

you write a ton on here about your personal finances. i tend not to. i only did in this case because you used your personal savings habits to bolster your incorrect statements about Roth IRAs. i should have resisted the impulse.

to the extent that you are saying that my salary and savings are irrelevant to this thread, i agree with you. but the fact is you mentioned my supposed $800k claim about 5 times in an attempt to discredit me. now i have to respond.

again, i'm sorry that i make so much more money than you. you don't have to justify your choices on a message board week after week. it's okay, really.

kaitainen wrote:

and i just took a 50% pay cut (that's right, i'm going to make 1/2 of what i currently make) because i thought it would make me happier.

to the extent that you are saying that my salary and savings are irrelevant to this thread, i agree with you. but the fact is you mentioned my supposed $800k claim about 5 times in an attempt to discredit me. now i have to respond.

1) You took a pay cut so that you'd be happier, and you tell me that after I already mentioned that happiness should be more valued. Are you going to tell my you have a red car also if I mention that mine is red?

2) You said you've saved more in 2 years than I have in my lifetime. That's where the $800,000 comes from, and actually, the $800,000 is there ONLY because you said you'd have $10 million by 60, and so I did the math (had to figure out the MAX you could have saved in 2 years to equal what I have -- was trying to give you the benefit of the doubt there as that's my way). I actually have MORE than what you said you would save in 2 years now at age 40, so no matter how you want to slice it, dude you're wrong.

3) You don't HAVE to respond at all. You can either choose to respond or choose not to respond -- unless of course you are not in control of your actions. Maybe you're a puppet on a string.

1) why would my job choices be at all relevant to a thread about IRAs?

2) if you have saved more than $800,000 from you and your wife's incomes during the last 15 or so years, then yes, i was clearly wrong.

somehow i doubt it though. you've said over and over again on this board that you have chosen a relatively low paying job, that your wife went to graduate school, and provided other reasons to justify your choice to make less money. it's hard to imagine that given those factors, you've saved over $50,000 per year.

but i don't know. you say you have. so i was wrong.

3) your attempts to use straw men and change the subject don't eliminate the fact that you were wrong about the basic point. your inability to admit this and your constant attempts to attack people remind me of our current president's methods.

4) you've made a fool of yourself on these last couple of pages.

kaitainen wrote:

1) why would my job choices be at all relevant to a thread about IRAs?

2) if you have saved more than $800,000 from you and your wife's incomes during the last 15 or so years, then yes, i was clearly wrong.

somehow i doubt it though. you've said over and over again on this board that you have chosen a relatively low paying job, that your wife went to graduate school, and provided other reasons to justify your choice to make less money. it's hard to imagine that given those factors, you've saved over $50,000 per year.

but i don't know. you say you have. so i was wrong.

3) your attempts to use straw men and change the subject don't eliminate the fact that you were wrong about the basic point. your inability to admit this and your constant attempts to attack people remind me of our current president's methods.

1) Because you made them relevant.

2) First of all, I've been out of college for 18 years. I started investing before I graduated, but if I could do it again, I would do even more. Even if I hadn't, you can't just add the amount of money saved and say that you saved that much, you count the amount of money that you HAVE, and that comes from growth of stocks and mutual funds. You don't need to save $50,000 for 16 years in order to have $800,000+ -- not even close; your suggesting that this is necessary tells me that you don't know how interest works. You DO though have to keep your money in investment vehicles and leave it there no matter what. When cash flow was tight, I didn't take money from retirement accounts -- I got a second job, and did that until the cash flow crisis was over. I've also never categorized my income as "low-paying". I've called it modest while others on this board have mentioned my level of income and referred to people who make that as "well off". I think it's subjective. I don't make enough that I can spend freely, so I save and invest and fully understand how that all works so I can play for retirement.

3) I was not wrong on my basic point. I just didn't provide all the info (as you didn't either), and quite honestly, no one on this thread has because there are lots of exceptions for withdrawal. If you have a Roth IRA and you decide that at age 57 you need to start taking from it because you want to retire early, then you're going to quickly be in a heap of trouble as you'll go through your contributions very quickly. I didn't point this out initially because I didn't think anyone in their right mind would take money from their retirement account except for when they really want to retire, and if that want to retire is BEFORE 59 1/2, you won't have much to take before you start to get dinged. Only a fool would use it as a checking account.

Also, when my wife went to graduate school, not only did she go on a full ride, but she received a generous stipend also, so in effect it was a job. She got paid but was also receiving her two graduate degrees. We had no children for the first 7 years of our marriage and saved and invested about half our total income during that time. The 90s were VERY good to us.

you really like to misrepresent what other people write. either that or you have very poor reading comprehension skills.

i don't know why i bother, here we go again:

the genesis of the "trust me because i have substantial retirement savings" was your post on page 3 of this thread. you wrote "If he's [meaning me] on pace to have more than ~$5 million by age 60 on a very moderate income, then fine, listen to him."

so naturally, i foolishly took the bait and responded. i wrote two things:

first, "you need not concern yourself with my retirement funds. my girlfriend and i (we're both under 30) will most likely save more in 2006 and 2007 combined than you have saved in your entire life (it's not like '06 and '07 are exceptions either)."

note that i said "most likely" and note that i said "save more." you can't disprove this statement of mine by telling us what your current retirement account balance is. i didn't say "more than you currently have in savings accounts of all kinds plus your home equity." i said save. it's a verb in this context, not a noun. argue with a straw man all you want. i don't care. just be honest when doing it.

second, i wrote: "we're on pace for $10 million by 60, easy. does that mean you should listen to me? absolutely not. you should read what i write if you are interested and then you should evaluate whether it makes sense. i always try to provide links when i can so that people can make such an evaluation. this is an anonymous running message board for god's sakes. use it as a starting point and hopefully you get good information that helps you find an authoritative answer."

note _on pace_ for $10 million. that does not mean that if we didn't work another day in our lives we would have $10 million at age 60. it means if we continue down the current path we will have that amount, as i said, easily.

and as i said - it's completely irrelevant. you keep trying to attack me and change the subject.

and once again, you look foolish doing so.

You are a strange cat, brother.

? wrote:

You are a strange cat, brother.

If by strange you mean different from others as in smarter and faster and more musically talented, then strange I am.

I think by strange cat I mean either you really get off on being a troll. Or, if you are really like how you come across in your posts then I feel kind of sad for you. I know that it maybe part of your roll playing persona to say it, but you really aren't any smarter the the average person on here either. Most of your advice is pretty generic, and kind of surface level.

1) You bother because you are a puppet on a string. Dance puppet, dance! (Oops, I'd better say "marionette" before you 'correct' me).

2) Regarding the word 'saved', so you're telling me that at retirement time if your investment advisor (if you have one) tells you that you've "saved" $465,000 that you'll think he just means $15,500 a year for 30 years and you won't wonder? Ok brother. Whatever. Saved to me is the amount you've saved in addition to what that money has made you. You're still young so you've not seen great gains from your investments yet. Perhaps that's where this attitude of yours comes from. Also, in the amount I have "saved" for retirement, I'm not counting home equity. It's more if I do that, but I figure I have to live somewhere when I retire, so I don't count that.

3) Not attacking you brother. Just pointing out flaws in your reasoning. Quit making them and I'll have no reason to respond.

? wrote:

I think by strange cat I mean either you really get off on being a troll. Or, if you are really like how you come across in your posts then I feel kind of sad for you. I know that it maybe part of your roll playing persona to say it, but you really aren't any smarter the the average person on here either. Most of your advice is pretty generic, and kind of surface level.

?,

Think about what you've just said -- most of my advice is pretty generic. Ok. What kind of advice are you suppose to give a guy who says, "I put $6233.33 away every month and will have only $187,000 in 30 years. How do all of you plan to end up with millions?" This kind of guy needs VERY basic advice. Should I start talking about no load funds or small cap vs. large cap or the differences between a money market account vs. a mutual fund? Hell no. That will confuse him or turn him off. He needs to know very basic stuff about how much money his $6233.33 will earn at 8% interest over 30 years or 35 years or whatever.

People should ALWAYS help the most needy first my brother.