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OT: How Do You Invest Your Money?

froginmn

Full Member
I mentioned a 529 plan. We started one (actually two, one per kid) in 2004. We didn't dump a lot into it initially but made contributions over the years.

For every 1,000 we have put in, the value is now 2,700. And as long as we use the funds for education, we'll take it out tax free.

There are very few investments that return like that, and even fewer where the proceeds come out tax free.
 
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Pharm Frog

Full Member
So how many people on here subscribe to the theory you should take on debt as long as you can earn more than the interest rate?

I’m going to need to buy a new vehicle next year, plan is to pay cash but theoretically I could take debt at a terribly low rate and surely beat it. Thoughts?
I don’t know very many people who need to buy a “new” vehicle. Maybe you are one of the few.
 

BABYFACE

Full Member
There's some good logic to that.

But I had lots of friends through the late 20s and early 30s that saved like sumbitches while I saved some and had lots of fun. You can't do as much crap when you're 65 as when you're 30 and life can be short so don't save to the point of not doing anything you want to.
Dammit, kind of what I did. We live by our choices.

Took a lot of ski trips and lived in a high rise on the beachfront in Miami for three years. Married in my early 30’s and then that lifestyle was gone. Had a hell of a time,
 
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jake102

Active Member
I don’t know very many people who need to buy a “new” vehicle. Maybe you are one of the few.

Thanks for the input

Whether the “new” vehicle is literally a new vehicle or not is yet to be decided, doesn’t really matter based on the question asked. Our last “new” vehicle was 5 years old.
 

tcumaniac

Full Member
Thanks for the input

Whether the “new” vehicle is literally a new vehicle or not is yet to be decided, doesn’t really matter based on the question asked. Our last “new” vehicle was 5 years old.
Depends what you're in the market for, but if you're okay buying a non-luxury vehicle I personally found that a new car isn't a terrible deal. Especially if you're interested in financing it and want the most competitive rate.

If you're set on a luxury brand (lexus, audi, mercedes, bmw, volvo, etc) you definitely pay a huge premium for a brand new car and can find huge savings in buying a slightly used car.

My car was totaled by a drunk driver in November 2018 leaving me having to buy a car in a hurry. I was looking for a mid sized suv and quickly did a ton of research. Looking at non luxury suvs, there just didn't seem to be enough savings buying a 2 to 3 year old suv compared to a brand new car. I ended up buying a brand new 2019 Hyundai Santa Fe with the second highest trim level for $31k after all taxes, title, and other fees. I financed the difference between the cost of the car and my insurance payout for 2.5%. I hated having a car payment, so I went ahead and paid it off a few months later. But in principle it wouldn't have been a bad car payment to have at that interest rate.

Two other things I learned from that experience:
  1. I aggressively fought back against the initial payout I was offered by the insurance company for my totaled car and got them to improve my payout by nearly $6k. Payout value is supposed to be determined by active listings in your immediate area for the same car at a similar mileage. I was able to find numerous listing that helped significantly improve comps for my totaled car, which ultimately improved my payout.
  2. For buying the new car, I figured out the exact car, color, and trim level I wanted, and reached out to every hyundai dealer in the greater metroplex through their online sales rep, which was usually an online live chat. I told them what I was looking for, that I was looking at every dealer in DFW, and I wanted their best out the door price they could offer. This usually led to follow up via email which gave me numerous competitive offers in writing. I used these offers to have the most competitive dealers further compete against each other, ultimately trying to get the closest dealer to me to agree to the best offer I was getting. Spoke to the sales rep over the phone making it clear that we were agreeing to the final out the door price and financing, and if anything changed once I got to the dealership I would leave. Got the final agreement in writing via email. Drove to the dealership. Test drove the specific car I was interested in. And was driving off the lot with my new car in under 2 hours. They still tried jerking my chain a few times and attempted to add some additional costs / increase my interest rate on the loan. After threatening to leave a few times, I finally got to what we had agreed to before I arrived. Anyway. Felt this strategy really helped me get an extremely competitive price for the car.
 
Needed a new car with new kiddos and bought a big rig with 0% apr for 60 months for the entire note...and got a deal on the car. I am not sure how they get away with that. I had the capacity to put almost all of it down but there is no point. "Financed" the whole thing.

We just got my wife a new Kia Telluride. Took 4 months to come in but worth the wait. Kia offered $2500 off msrp if we went through their financing. Figured I'd do that and then refinance before even making a payment. Turns out their rate is .75% lower than anything I've been able to get elsewhere.
 

tcumaniac

Full Member
We just got my wife a new Kia Telluride. Took 4 months to come in but worth the wait. Kia offered $2500 off msrp if we went through their financing. Figured I'd do that and then refinance before even making a payment. Turns out their rate is .75% lower than anything I've been able to get elsewhere.
I love the new Telluride. That and the new Hyundai Palisade are very sharp and get great reviews. And are very reasonably priced.

I assume your wife loves her new Telluride?
 
I only park in the garage, so I must have missed it ;)

Saw one the other day in the parking lot with an alternative logo on the front that looked more like a Lexus logo than a KIA logo. Don't think I'm personally a big fan of doing that.

Yeah, that's an option if you get the Prestige package and it looks really stupid. The guy at the dealership warned us when we ordered ours that it's not a good look.
 

HToady

Full Member
I mentioned a 529 plan. We started one (actually two, one per kid) in 2004. We didn't dump a lot into it initially but made contributions over the years.

For every 1,000 we have put in, the value is now 2,700. And as long as we use the funds for education, we'll take it out tax free.

There are very few investments that return like that, and even fewer where the proceeds come out tax free.
I have a 529 for my granddaughter as well. I have one question, since the money contributed is post tax, if your child does not use all the money will you be able roll the remainder into a Roth for them tax free?
 

froginmn

Full Member
I have a 529 for my granddaughter as well. I have one question, since the money contributed is post tax, if your child does not use all the money will you be able roll the remainder into a Roth for them tax free?
Not a financial or tax guy but I think the answer is no. Funds remaining can be used for someone else's education or can be withdrawn but withdrawals are taxable.
 

ftwfrog

Active Member
Needed a new car with new kiddos and bought a big rig with 0% apr for 60 months for the entire note...and got a deal on the car. I am not sure how they get away with that. I had the capacity to put almost all of it down but there is no point. "Financed" the whole thing.
scheiss that! I’d be alright with a new car, but it comes with new kids? For the birds.
 

McFroggin

Active Member
I have a 529 for my granddaughter as well. I have one question, since the money contributed is post tax, if your child does not use all the money will you be able roll the remainder into a Roth for them tax free?

No, but it can be rolled over to another kid, grandchild, yourself, etc.
 

Dogfrog

Active Member
We did Texas Tomorrow back when our kids were born. They both got degrees, the youngest in 2014. Just got a check last year for about $1800 for unused hours which is reported on a 1099Q so taxable. That was a great program, unfortunately no longer available but assume the 529’s are similar.

Also another thing people (including me) fail to plan for is long term care. Helped my mom into a very nice tax exempt residential community last year at age 89. Didn’t really consider it until I visited and looked into the details. We will definitely be going that route in maybe 15 years or so.
 

HG73

Active Member
If you are comfortable with debt then go get some, rates are fantastic right now. We have always been as debt averse as possible so consequently we have none. Coming from someone who paid 12% escalating on our first mortgage a hunnerd years ago ('79).

Best investment advice is don't have kids, but your wife will probably overrule.
 

WIN

Active Member
If you are comfortable with debt then go get some, rates are fantastic right now. We have always been as debt averse as possible so consequently we have none. Coming from someone who paid 12% escalating on our first mortgage a hunnerd years ago ('79).

Best investment advice is don't have kids, but your wife will probably overrule.

I'm investing in my son big time, looking for him to take care of me someday!
 

berryfrog95

Active Member
Not a financial or tax guy but I think the answer is no. Funds remaining can be used for someone else's education or can be withdrawn but withdrawals are taxable.
Yep, more specifically the earnings are taxable with a 10% penalty. It’s imperative you look for opportunities to make these funds portable to other family members if possible. Otherwise, the taxation is not the worst deal in the world....
 
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