Ahhh, it's a slow Friday in the city, can't wait to get out of the office, hit the gym (I've lost three pounds in two weeks- yeah!) and then enjoy a lazy Friday night, free of airports and train stations and packing suitcases.
A few things I've been thinking about:
1) Should I invest in a Roth rather than Traditional 401k?
I called my parents yesterday to share with them the good news of my awesome summer bonus and my dad made some joke about finding a way to fool the tax-man... my mom, on another phone in the house, promptly told me not to listen to him, since she doesn't want her only daughter to end up in jail... funny, my parents, these days... But then I asked my dad his opinion on Roth vs. Traditional, and he is of the mindset that taxes are likely to go up, as they've not only been much higher in the past, but the nature of the changing demographic will also likely require taxes to be higher, as well (more elderly people to support, no social security, etc.). I read a timely analysis by Dog Ate my Finances on the cost effectiveness of Roth vs. Traditional if taxes stay the same, and so really the only factor I'm gambling on are that tax rates will go up, which I am willing to bet. (Either that, or I am planning to be in a higher income-tax bracket at the time). I was originally contributing to a pre-tax 401k to minimize the impact to my bottom line, since I needed the extra cash. Now that I've gotten a raise, I think I can afford to deduct a bit more from my paychecks next year. I'll keep you updated, but since I've already maxed out my 401k for the year, it will be next year's business.
2) Why was my cash rebate so low on my Discover Card statement last month?
I never blogged about this mystery, but I found out the answer and will share it with you. My Discover Card statement last month was a hefty $660 or so, but my cash back reward was only $1.41 :(.... Turns out that Discover Card has a pro-rated cashback bonus schedule, as follows:
$0 - $1,500: Earns 0.25%
$1,500.01 - $3,000: Earns 0.5%
$3,000.01 +: Earns 1%
I've definitely spent more than $3,000 on my Discover Card this year with all of my traveling, but it turns out that my "anniversary" with the card is June 25, which is why my July purchases only accrued .25% in cashback awards. Oh well, at least that answer makes sense.
3. How do I actually deduct my losses in the stock market from my taxes?
I have no idea. I know I have to sell my stocks at a loss first, but do I have to sell my winners, too, and write off the difference? I'm confused, but since I've lost a lot of money in the stock market this year (although I'm not exactly sure how much), I might as well take advantage of this tax benefit if I can. But part of me wants to hang onto the losers until they become winners again :)
Showing posts with label 401k. Show all posts
Showing posts with label 401k. Show all posts
Friday, August 1, 2008
Wednesday, July 30, 2008
Comp Day
Today is the almighty Comp Day, the day when I learn what my bonus will be for the year's worth of toil. I imagine that I will find out sometime later this afternoon between 3 and 5pm, so if you're reading this early in the morning, keep your fingers crossed for me! The bonus I got last year made me very happy, but as the business has not be doing as well this year (although our firm has held in better than our competitors), I don't think there's as much money to go around. Our bonuses are a substantial part of our compensation, because while the salaries are decent, they're not very impressive alone and don't stretch too far in NYC.
Despite the smaller pool of bonus money this year (I assume), I am optimistic b/c my performance review indicated a dramatic improvement from last year, and as such I am ranked in the 1st quartile of analysts at my firm! I am hoping that this translates into $$.
Effective August 1 is my promotion from analyst to associate, which comes with a 20% raise in my salary!!! That's HUGE!!!! Because of all of my before-tax deductions (FSA, gym membership, transit card, etc.) I'm not sure how many extra dollars this will exactly translate into. Also, I will have maxed out my social security tax for the year, so that's an extra kick to my paycheck! I've only invested about $3k in my 401k this year, so I will be maxing out the remaining ~$12 from my bonus. This will dramatically reduce the amount of cash I have leftover from my bonus, but I purposely kept my monthly contributions low in anticipation of this large mid-year contribution. That means I will have a couple hundred extra dollars each month to play with (aka SAVE) that I was previously contributing to my 401k. Additionally, my share of rent is a little bit lower because my new roommate is paying a bit more than my old one, so that's also extra cash I didn't have. Thus, a few new reasons to love my paycheck on August 15!
Anyway, wish me luck on my bonus... I'm trying to go in with low expectations, but even if I'm disappointed, I need to remember all of the blessings that I have that money cannot buy!
Despite the smaller pool of bonus money this year (I assume), I am optimistic b/c my performance review indicated a dramatic improvement from last year, and as such I am ranked in the 1st quartile of analysts at my firm! I am hoping that this translates into $$.
Effective August 1 is my promotion from analyst to associate, which comes with a 20% raise in my salary!!! That's HUGE!!!! Because of all of my before-tax deductions (FSA, gym membership, transit card, etc.) I'm not sure how many extra dollars this will exactly translate into. Also, I will have maxed out my social security tax for the year, so that's an extra kick to my paycheck! I've only invested about $3k in my 401k this year, so I will be maxing out the remaining ~$12 from my bonus. This will dramatically reduce the amount of cash I have leftover from my bonus, but I purposely kept my monthly contributions low in anticipation of this large mid-year contribution. That means I will have a couple hundred extra dollars each month to play with (aka SAVE) that I was previously contributing to my 401k. Additionally, my share of rent is a little bit lower because my new roommate is paying a bit more than my old one, so that's also extra cash I didn't have. Thus, a few new reasons to love my paycheck on August 15!
Anyway, wish me luck on my bonus... I'm trying to go in with low expectations, but even if I'm disappointed, I need to remember all of the blessings that I have that money cannot buy!
Thursday, July 24, 2008
Fears I Won't Confront
Yes folks, I am completely avoiding an aspect of my financial portfolio, because I'm afraid of what I'm going to find. I can deal with the 4% decline in the value of my 401k this year..... not TOO bad, considering what is going on in the market. However, I don't think that I can deal with seeing the amount I've lost in my stock portfolio :(
I can't bring myself to even log in to my brokerage account. The number is going to be so ridiculously low, that I don't even want to know what it is. I'm just considering it to be money that I don't have anymore :(
**DISCLAIMER** Everything mentioned below in regards to investing or to the specific companies in my portfolio is an OPINION, and not an expert one, at that!
It all started last summer after I received a bonus from my employer, and since I already had a lot of money invested in CDs at various banks, I wanted to diversify. Plus they always tell you to invest in stocks when you're young and have a more aggressive investment strategy- 60% stocks, 40% bonds is what they say. So, I set up a brokerage account and wired in some cash. At first it was a lot of fun! Pick companies that I like and BAM! I own part of it! The market was on a steady rise in August, so I felt like a rock star every time I looked at my portfolio and saw all of the green numbers (indicating a positive change). This inspired me to invest even more, until eventually I had invested $27,500. In hindsight, I acknowledge that my purchases were driven emotionally, and not based on sound financial research. I missed a lot of important metrics such as price/earning ratios, expected growth, earnings margins, etc. which is probably why the bulk of my portfolio has declined. I knew that I should study those numbers, I just... didn't.
My holdings, in order of purchase:
*A Gold exchange-traded-fund (ETF) (Ticker: GLD), partly as a hedge, as commodities will rise when the dollar decreases in value, and also just because I believe in the value of semi-rare metals.
*Celanese Corporation (CE), the chemical company that my grandfather worked for, just to be loyal. My grandma owns a lot of it, and so it gives us something extra to chat about :)
*Cheesecake Factory (CAKE), because that place is ALWAYS busy, even at odd times of the day! I have never gone there and not had to wait for a table, so that must mean that they are rolling in the dough, right? Apparently not....
*Chipotle Mexican Grill (CMG), because the stock looked unstoppable, rising 1-5% a week on occasion! I wanted to get in before I lost my opportunity.
*GOOGLE! (GOOG) One day they will own the world, I am convinced of that fact. Shareholders used to agree with me; now, not so much. Even at $700/share, I thought it was cheap.
*Brazil (EWZ) and India (INP) ETFs also partly as a hedge against US dollar-denominated assets, but also as a view on rising emerging market players. Brazil has become an active player in the global markets, even having developed its own trading exchanges. India is embracing microfinance and I think that it will earn itself a secure place in the global markets, in time.
*Under Armour (UA), my favorite brand of performance wear, and they have recently acquired exclusive contracts with almost every major league sports franchise to supply their uniforms and gear. This has to pay off, right?
*Lastly, but not least.... Citigroup (C) One of my colleagues used to work for Citigroup and thought their stock was really cheap, so he bought a boat-load of it. I and a few of my colleagues who discuss our stock trades decided to go into the trade with him... unfortunately.
SIGH. Big, long, loud SIGH. What went wrong? Well, a few things. August through October, when I bought most of my stock holdings, was a cheery time in the markets. Subprime woes were being mitigated, banks were staying afloat, and everyone was enjoying long weekends at the beach or watching baseball games. Everyone was HAPPY!
Then, gas prices finally began to affect the consumer, and fewer people were driving to go out to eat (Cheesecake Factory or Chipotle, anyone?) or buying retail goods if it wasn't absolutely necessary (Under Armour). Then, banks started writing down their portfolios of mortgages and other stuff no one wanted to buy, and so my Citigroup stock sank like a ship (my colleague still thinks it's cheap and will buy more if it goes below $10/share). My emerging market plays have held in, and Celanese and gold have risen a bit since I bought them, but as they were my first purchases, I bought a lot less of them than of the other stocks I own, since I was just dipping my toes in to start. As I became more confident in my stock trading, the number of shares I purchased increased, as well, and so my later purchases tend to be my biggest ones.
I'm afraid that I've lost more than 1/3 of my investment. I know that I should cut my losses at some point, and I know that somehow they're tax deductible (but not clear exactly on the specifics), but part of me just wants to hold on and wait for the market to correct itself before evaluating the fate of my holdings. In the meantime, as I said, I'm too fearful to log in to my account and face the truth.
Thus, if I ever do a "net worth analysis" on my blog, it will probably not include whatever pennies are left in my brokerage account.
:(
I can't bring myself to even log in to my brokerage account. The number is going to be so ridiculously low, that I don't even want to know what it is. I'm just considering it to be money that I don't have anymore :(
**DISCLAIMER** Everything mentioned below in regards to investing or to the specific companies in my portfolio is an OPINION, and not an expert one, at that!
It all started last summer after I received a bonus from my employer, and since I already had a lot of money invested in CDs at various banks, I wanted to diversify. Plus they always tell you to invest in stocks when you're young and have a more aggressive investment strategy- 60% stocks, 40% bonds is what they say. So, I set up a brokerage account and wired in some cash. At first it was a lot of fun! Pick companies that I like and BAM! I own part of it! The market was on a steady rise in August, so I felt like a rock star every time I looked at my portfolio and saw all of the green numbers (indicating a positive change). This inspired me to invest even more, until eventually I had invested $27,500. In hindsight, I acknowledge that my purchases were driven emotionally, and not based on sound financial research. I missed a lot of important metrics such as price/earning ratios, expected growth, earnings margins, etc. which is probably why the bulk of my portfolio has declined. I knew that I should study those numbers, I just... didn't.
My holdings, in order of purchase:
*A Gold exchange-traded-fund (ETF) (Ticker: GLD), partly as a hedge, as commodities will rise when the dollar decreases in value, and also just because I believe in the value of semi-rare metals.
*Celanese Corporation (CE), the chemical company that my grandfather worked for, just to be loyal. My grandma owns a lot of it, and so it gives us something extra to chat about :)
*Cheesecake Factory (CAKE), because that place is ALWAYS busy, even at odd times of the day! I have never gone there and not had to wait for a table, so that must mean that they are rolling in the dough, right? Apparently not....
*Chipotle Mexican Grill (CMG), because the stock looked unstoppable, rising 1-5% a week on occasion! I wanted to get in before I lost my opportunity.
*GOOGLE! (GOOG) One day they will own the world, I am convinced of that fact. Shareholders used to agree with me; now, not so much. Even at $700/share, I thought it was cheap.
*Brazil (EWZ) and India (INP) ETFs also partly as a hedge against US dollar-denominated assets, but also as a view on rising emerging market players. Brazil has become an active player in the global markets, even having developed its own trading exchanges. India is embracing microfinance and I think that it will earn itself a secure place in the global markets, in time.
*Under Armour (UA), my favorite brand of performance wear, and they have recently acquired exclusive contracts with almost every major league sports franchise to supply their uniforms and gear. This has to pay off, right?
*Lastly, but not least.... Citigroup (C) One of my colleagues used to work for Citigroup and thought their stock was really cheap, so he bought a boat-load of it. I and a few of my colleagues who discuss our stock trades decided to go into the trade with him... unfortunately.
SIGH. Big, long, loud SIGH. What went wrong? Well, a few things. August through October, when I bought most of my stock holdings, was a cheery time in the markets. Subprime woes were being mitigated, banks were staying afloat, and everyone was enjoying long weekends at the beach or watching baseball games. Everyone was HAPPY!
Then, gas prices finally began to affect the consumer, and fewer people were driving to go out to eat (Cheesecake Factory or Chipotle, anyone?) or buying retail goods if it wasn't absolutely necessary (Under Armour). Then, banks started writing down their portfolios of mortgages and other stuff no one wanted to buy, and so my Citigroup stock sank like a ship (my colleague still thinks it's cheap and will buy more if it goes below $10/share). My emerging market plays have held in, and Celanese and gold have risen a bit since I bought them, but as they were my first purchases, I bought a lot less of them than of the other stocks I own, since I was just dipping my toes in to start. As I became more confident in my stock trading, the number of shares I purchased increased, as well, and so my later purchases tend to be my biggest ones.
I'm afraid that I've lost more than 1/3 of my investment. I know that I should cut my losses at some point, and I know that somehow they're tax deductible (but not clear exactly on the specifics), but part of me just wants to hold on and wait for the market to correct itself before evaluating the fate of my holdings. In the meantime, as I said, I'm too fearful to log in to my account and face the truth.
Thus, if I ever do a "net worth analysis" on my blog, it will probably not include whatever pennies are left in my brokerage account.
:(
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