The "up-to-the-minute Market Data" thread

Originally posted by GreenBicMan
reply to post by redhatty

 

Ok, your situation is only good if the market goes to like 100 pts then stays there for forever...

Won't happen, there are always new companies looking to build capital for expansion of the business

Mine is realistic, dont take your $$ out of your 401(k), as long as you believe in USA that is, and dollar cost average.

I wonder, if we both left this site for 5 years, came back (if the economy or internet is still here, and according to Gereld Celente that is questionable lol..) and we will see who had the better idea...

You still didnt touch on the point, that you would be down 20% or so with your idea the past month.. prob. be kicking yourself now, b/c with the tax penalty you just paid for withdrawing early, its more like 40% you just lost in 30 DAYS!!!!!!!!!! LOL GENIUS MOVE!!!!!!!!!!!!!!!

But... If I had 100K in my 401K in 2006 or 2007 and took it out then, before the crash, I'd still have 100K (after taxes) in my safe (assuming it was never touched)

While the person who kept their 100K in a 401K till today MIGHT have 30K left. I'm still the one better off.

401Ks were designed to be a TAX SHELTER, NOT A RETIREMENT ACCOUNT. Pensions, paid for by employers are designed to be retirement accounts. The EMPLOYEE pays ALL COSTS on the 401K, and assumes ALL THE RISK TOO.

So if you put money into a 401K as a retirement account, WHO IS THE BIGGER FOOL?

I dont think i touched on the tax situation, but you of course will be monitored with a cash check coming from a brokerage firm to either roll that into something, or pay way high on your taxes b/c you are withdrawing too early... and that leads to a whole nother situation dude...

Taxes are usually withdrawn by the account holding company BEFORE you receive your check, you just get the tax form at the end of the year. And yes the taxes are steep, the 401K is a TAX SHELTER, designed to avoid the taxes until withdrawal.

You realize, that - using the above example - If I took my 100K out in 2007 and after taxes had say 80K left and put that into 6 month CDs rolling it until NOW, I'd still have over 100K or more?

BTW, it is not THAT HARD to get a hardship withdrawal of your 401K and not have quite as much tax liability.

But again, it just proves my point that a 401K is completely paid for by the employee, you may get matching funds from an employer, but you carry all the tax burden and all the risk and all fees are paid for from your (and matching) contributions.

Where do you win in this game?

your way sucks IMO.. and im not trying to be mean, seriously, im just really stating what i god honest to believe is the right approach

And I cant argue about deregulation... you are quite intelligent in those areas

You can emotionally feel whatever you choose, but you have not presented even one serious factual or logical argument against what I am saying.

I don't give a HOOT about what you FEEL.

ETA: As to elaborating on Bretton Woods, GBM, as I have said over & over, you must learn how to educate YOURSELF. the information is out there & google is your friend

[edit on 4/24/09 by redhatty]

reply to post by redhatty


Wow redhatty, just wow. So many stars in a row.
When we really believe what we teach it just flows out!

Thank you for all your effort!

reply to post by redhatty


FIRST PROBLEM WITH THAT

100k after taxes IS NOT 80K

You first get a 10% penalty

Then you add this to your regular income tax level.

So if you are at the 25-35% bracket you are now at 35-45% bracket

100k = 65-55k


That means that not only would you have just lost out on this 20% rebound, you just also paid uncle ben potentially 35-45 THOUSAND DOLLARS

Uncle Ben LOVES the ignorant = sell low/buy high and pay taxes HAHAHA

And everything is 20/20 hindsight, you can not totally predict a top or bottom, that is why you DOLLAR COST AVERAGE, say it with me.. "DOLLAR COST AVERAGE" like I said, when the market fully turns around, its going to be an explosion (if it hasnt already, biggest 5-6 week gain since 1930's)

Originally posted by burntheships
reply to post by redhatty

 

Wow redhatty, just wow. So many stars in a row.
When we really believe what we teach it just flows out!

Thank you for all your effort!

Thank you for blindly following him, you have still yet to debate my thesis on the 20,50,200 EMA

Originally posted by redhatty

Originally posted by GreenBicMan
reply to post by redhatty

 

Ok, your situation is only good if the market goes to like 100 pts then stays there for forever...

Won't happen, there are always new companies looking to build capital for expansion of the business

Mine is realistic, dont take your $$ out of your 401(k), as long as you believe in USA that is, and dollar cost average.

I wonder, if we both left this site for 5 years, came back (if the economy or internet is still here, and according to Gereld Celente that is questionable lol..) and we will see who had the better idea...

You still didnt touch on the point, that you would be down 20% or so with your idea the past month.. prob. be kicking yourself now, b/c with the tax penalty you just paid for withdrawing early, its more like 40% you just lost in 30 DAYS!!!!!!!!!! LOL GENIUS MOVE!!!!!!!!!!!!!!!

But... If I had 100K in my 401K in 2006 or 2007 and took it out then, before the crash, I'd still have 100K (after taxes) in my safe (assuming it was never touched)

While the person who kept their 100K in a 401K till today MIGHT have 30K left. I'm still the one better off.

401Ks were designed to be a TAX SHELTER, NOT A RETIREMENT ACCOUNT. Pensions, paid for by employers are designed to be retirement accounts. The EMPLOYEE pays ALL COSTS on the 401K, and assumes ALL THE RISK TOO.

So if you put money into a 401K as a retirement account, WHO IS THE BIGGER FOOL?

I dont think i touched on the tax situation, but you of course will be monitored with a cash check coming from a brokerage firm to either roll that into something, or pay way high on your taxes b/c you are withdrawing too early... and that leads to a whole nother situation dude...

Taxes are usually withdrawn by the account holding company BEFORE you receive your check, you just get the tax form at the end of the year. And yes the taxes are steep, the 401K is a TAX SHELTER, designed to avoid the taxes until withdrawal.

You realize, that - using the above example - If I took my 100K out in 2007 and after taxes had say 80K left and put that into 6 month CDs rolling it until NOW, I'd still have over 100K or more?

6 month CD???

I thought you dont trust banks?

Putting capital in their hand is the same as investing..

Cant have your cake and eat it too mr. hat

Originally posted by GreenBicMan
reply to post by Avarus

 

What I am saying is, when the turnaround comes (already happening in my opinion)

You think so? Here are a few signs that might not be the case:

Toyota forecasts first operating loss in 71 years.

3 U.S. Steel plants to idle

Microsoft sales fall for first time in 23 years

And that is just a few that indicate things aren't so rosy.

GBM...don't get caught reaching into the cookie jar for too much longer, because this is nothing but a power of positive thinking, stick your head in sand and buy rally, that will shortly find there is very little dough left to make those cookies.

reply to post by TH3ON3


Microsoft has more money in cash than most nations do

Not a very good example

reply to post by redhatty


You are way off on your thoughts. First off most 401k plans have a matching contribution. Nationwide, it is an average equal to about 40% of total contributions. Therefore of that 100k only 60K actually came from the employee. The rest was a gift from the employer. Particpating is a no brainer as you are up 40% from day one.

Secondly if you were in a all equity diversified portfolio you are down about 30% from the top, so you still have 70K left. If you diversified into bonds then your return is better. Many folks are 100% in fixed income in their 401'k. So worst case for most 401k investors starting with 100k at the top of the market is actually a profit of $10,000 due to the employer contribution. Sure $30,000 of that contribution wa slost but it wasn't the employees money in the first place.

Thirdly employers generally cover most of the cost of running a 401K plan. partcipants may have to pay a quarterly account free or up to a 1%(usually lower) fee for an advisor to help them with their allocation and provide other services. Do you expect people to work for free? Employer contribution covers this cost many, many times over.

As far as taxes go you have to pay a 10% penalty plus income tax. You say 20% total which would reflect a 10% tax bracket. Not many folks with 100K in their 401k are in the 10% bracket. If you then you have been saving for sometime which mean you are up considerable money. More realistically the total is like 30%. So basically you are left with the same 70K after going through the worst bear market most people alive have ever seen or been old enough to understand and now you have to pay taxes on any earnings from that money as well..

401k Plans are a great thing for employees. Anyone who been in one for longer than 10 years is at worst breaking even, but more likely up 40-50% on their own money if not more. Don't forget with a 401k plan you are buying when the market is low as well as when it is high. Over time this alone will add 5% a year or so to your returns.

Cashing out your 401K provided no benefit to anyone, even if they were invested entirely in stocks. You should rethink your beliefs.

reply to post by GreenBicMan



Well you just go get yourself some more cookies and milk cause it will make everything better.

When one of the pillars of success like Microsoft has such a drastic drop in sales in 23 years, and another highly successful car company, Toyota has their first loss in 71 years, and a US Steel plant closes for first time in 121 years, it might be time to take a few deep breaths and see what might be around the bend.

Originally posted by GreenBicMan
reply to post by redhatty

 

FIRST PROBLEM WITH THAT

100k after taxes IS NOT 80K

You first get a 10% penalty

Then you add this to your regular income tax level.

So if you are at the 25-35% bracket you are now at 35-45% bracket

100k = 65-55k

WRONG. There is a 10% penalty and the brokerage company is ONLY REQUIRED to hold back 10% more for tax liability. There are options on the paperwork when withdrawing for them to take out the minimum required, or taxes at your current tax bracket.

Anyone who chooses the latter is a fool, because you can usually work out more than enough tax credits at the EOY filing to offset any further tax liability.

That means that not only would you have just lost out on this 20% rebound, you just also paid uncle ben potentially 35-45 THOUSAND DOLLARS

If your tax bracket is 27.5% and you have no other ways to reduce your tax liabilities, you are already ignorant. PS, Uncle Sam would not be the one who received all of it, believe me, that 10% penalty right off the top gets split up many ways.

But you are studying to take your Series 7, you should already have a passing knowledge of these things.

Uncle Ben LOVES the ignorant = sell low/buy high and pay taxes HAHAHA

And everything is 20/20 hindsight, you can not totally predict a top or bottom, that is why you DOLLAR COST AVERAGE, say it with me.. "DOLLAR COST AVERAGE" like I said, when the market fully turns around, its going to be an explosion (if it hasnt already, biggest 5-6 week gain since 1930's)

Okay GBM, put some proof in your pudding. Let's say I bought Citi, one of your favorites, in 2007

What is my dollar cost average if I still hold it today, initial investment of 10K?

Can you calculate negative numbers???

It's a shame you don't know more about Elliott Wave Theory, or you would look at this rebound in a very different light.

But you can't teach those who refuse to learn

Originally posted by GreenBicMan
6 month CD???

I thought you dont trust banks?

Putting capital in their hand is the same as investing..

Cant have your cake and eat it too mr. hat

Yes From 2006 or 2007 till now, yes. I do not believe in Feeding the beast, but that has only come to light in the last, what 6-8 months? So the CD would have matured for safe withdrawal by now anyway, wouldn't it?

No contradiction in what I said at all.

reply to post by TH3ON3


They sold more than they did in the 2007 period.

They also made $3 billion in 3 months.

Everyone should be in as bad as shape as Microsoft.

reply to post by redhatty


Since the top of the market you would have 3 6 month cd's mature giving you 10% profit total if you were very lucky. So your 100k is now worth 77k. Real smart thinking pulling money out of your 401k. Why notjust move the money to a conservative option. Most have money market accounts which are now insured on an equal basis as CD's.

You can'twin the argument. Taking money out of your 401k is a dumb move unless you needed the money to support yourself.

reply to post by disgustedbyhumanity


So what your telling me is that the bad news part is really good news? And that if you look at any black cloud you can see a silver lining?

Get in the conga line with the rest of the Norman V. Peale adherents.

The sun is gonna come out tomorrow, bet your bottom dollar...you will need your rose colored glasses to protect your eyes, and don't forget your spf 100 suntan lotion either.

reply to post by redhatty


Regardless of your deductions you will still pay the the full tax on the withdrawals. It's not like you don't get those deductions even if you don't take money out.

Anyone who bought Citibank or other individual stocks in their 401k's deserve to lose their money. Even Jim Cramer says only buy funds and ETF's in your 401k. Thats what he does. Also anyone who bought Citi in their 401k is managing it on their own in a self directed account, as individual stocks are not on the investment menu except for maybe your employers. Usually employer stock investments are limited to the company match.

You really don't know what you are talking about.

Originally posted by disgustedbyhumanity
reply to post by redhatty

 

You are way off on your thoughts. First off most 401k plans have a matching contribution. Nationwide, it is an average equal to about 40% of total contributions. Therefore of that 100k only 60K actually came from the employee. The rest was a gift from the employer. Particpating is a no brainer as you are up 40% from day one.

Not anymore. A recent survey by Spectrem Group found that 34% of U.S. employers had reduced or eliminated their matches since January 2008, and another 29% intended to do so over the next 12 months (Jan 09).

The Pension Rights Center, which keeps a running tally of companies that have cut their 401(k) matches, reports that more than 100 employers are on the list.

Secondly if you were in a all equity diversified portfolio you are down about 30% from the top, so you still have 70K left. If you diversified into bonds then your return is better. Many folks are 100% in fixed income in their 401'k. So worst case for most 401k investors starting with 100k at the top of the market is actually a profit of $10,000 due to the employer contribution. Sure $30,000 of that contribution wa slost but it wasn't the employees money in the first place.

If it is in an account in my name, I'd consider it my money Wouldn't you?

Plus most of the J6Ps don't have a CLUE as to where to put the $$ in their 401Ks out of the options given, so what do they do? call the 1-800 # for the brokerage and get advise from them.

IS that always the best advice, NO and you & I both know it well.

I friend I know, who, at 100% fully vested lost over 13K from a 30K 401K IN 2 MONTHS. Almost 50% IN 2 MONTHS!!

Your example is a "Best Case" scenario, not the average scenario

Thirdly employers generally cover most of the cost of running a 401K plan. partcipants may have to pay a quarterly account free or up to a 1%(usually lower) fee for an advisor to help them with their allocation and provide other services. Do you expect people to work for free? Employer contribution covers this cost many, many times over.

Wrong, sorry.

Many 401k plan participants believe that their retirement plan is a benefit provided at no cost by their employer. But, in fact, 401k plans have many associated fees and most of these are paid by the plan participant - not the employer. A recent study of 401k fees finds that participants bear the majority of 401k plan costs: participants pay 83% of 401k plan fees while employers cover 13% and the plans cover 4%. Participants pay the majority of plan fees in the form of investment expense ratios. This means the fees are deducted directly from the 401k account so that it is not always clear to the participant that he or she is paying.

Source

As far as taxes go you have to pay a 10% penalty plus income tax. You say 20% total which would reflect a 10% tax bracket. Not many folks with 100K in their 401k are in the 10% bracket. If you then you have been saving for sometime which mean you are up considerable money. More realistically the total is like 30%. So basically you are left with the same 70K after going through the worst bear market most people alive have ever seen or been old enough to understand and now you have to pay taxes on any earnings from that money as well..

Again, you have the CHOICE of full tax withdrawal or minimum tax withdrawal in the paperwork. If you do not have any other way to reduce your tax liability, you will pay the difference with your annual filing.

The rest of your example is again dependent on your "Best Case Scenario" above. Unfortunately, that scenario is not what the average person has experienced.

401k Plans are a great thing for employees. Anyone who been in one for longer than 10 years is at worst breaking even, but more likely up 40-50% on their own money if not more. Don't forget with a 401k plan you are buying when the market is low as well as when it is high. Over time this alone will add 5% a year or so to your returns.

Cashing out your 401K provided no benefit to anyone, even if they were invested entirely in stocks. You should rethink your beliefs.

And I say, again, that you are wrong. 401Ks were designed as a TAX SHELTER not a retirement account. Go back a page and see that Huffington Post link and the Frontline Video, then get back to me about who really benefits from the 401K.

reply to post by TH3ON3


It's the facts dude. That's all. You cannot disprove one thing I have said. It is obvious that some people cannot accept the truth and would rather dwell on the negatives even if they are just an illusion.

Anyway, today will be one thing or the other.

1- They show how really the big banks are worth... worthless and they let them fail and they ban CDS, while arresting the bankers for their treasonous action, audit the FED while nationalizing it...
2- They sugarcoat it while saying that the banks need a little more money (1 trillions +++) before all is good again...

IMO it will be 2. But I would want reality to set in, I want 1. LET THE BANKS FAIL.

And to those who think the FED is controlled by the government... no it's not. In my history class at university in Canada, I was surprised that our teacher said that the FED was private... I thought he would go along with the propaganda... but no. The FED is private, period.

reply to post by GreenBicMan


Your welcome, and no thanks.

And to add that I do not blindly follow anyone. If you cared to you could and would know why and how I come to think what I do...and while I agree with redhatty, and admire the fact that he will strike out on the keys to try to teach someone the truth, I have decades of my own experience.

You and I just do not see it the same, I have read your posts, and your theory...we are on different planes. Nothing personal though....

Originally posted by disgustedbyhumanity
reply to post by redhatty

 

Regardless of your deductions you will still pay the the full tax on the withdrawals. It's not like you don't get those deductions even if you don't take money out.

Anyone who bought Citibank or other individual stocks in their 401k's deserve to lose their money. Even Jim Cramer says only buy funds and ETF's in your 401k. Thats what he does. Also anyone who bought Citi in their 401k is managing it on their own in a self directed account, as individual stocks are not on the investment menu except for maybe your employers. Usually employer stock investments are limited to the company match.

You really don't know what you are talking about.

Jim Cramer???? ROFLMAO And I don't know what I'm talking about???

As far as tax deductions, I still don't make enough $$ to cash in on all that I can deduct, you are limited by the income ratio, so YES there are ways to save yourself the tax penalty.

But keep on with that Cramer Mentality - I wish you well :-) Do you follow iTulip too? ROFLMAO