I Hate Dialysis Message Board
Dialysis Discussion => Dialysis: Working while on Dialysis => Topic started by: edger1 on September 20, 2017, 08:10:19 PM
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I have social security disability insurance and I read that passive income does not count towards the Substancial gainful activity since its a passive income, I was wondering if anyone here plays the stock market to make extra money?
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I invest long term via mutual funds. I took a gamble and put some cash in Fidelity MSCI Health (FHLC) and it's up 20% in 10 months, but the rest in more diversified funds.
Anyone who thinks you can do short term trading to generate income is either very lucky ... for now ... or delusional. If you want income from investments, look at bonds or dividend stocks (and mutual funds emphasizing these). But, if you have enough $$ to make a meaningful play in the market, chances are you already know this.
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Excellent answer, I just started to receive my Disability, so i have a few things to pay, but I want to invest ao I have, hopefully, extra money saved later down in life
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Actually the best advise I have heard is buy what you know. I was a system programmer for many years and did well buying companies whose products I realized were game changers.
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Don't gamble. Just invest in low fee basic index funds.
Of note.
Warren Buffett Wins $1M Bet Made A Decade Ago That The S&P 500 Stock Index Would Outperform Hedge Funds
https://seekingalpha.com/article/4107853-warren-buffett-wins-1m-bet-made-decade-ago-s-and-p-500-stock-index-outperform-hedge-funds
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Don't gamble. Just invest in low fee basic index funds.
The trick is "which index?". There are also plenty of sector funds that insulate you from single company risk, as well as balanced funds that attempt to pick an age appropriate mix of bonds, stocks, and cash.
The flip side is that the people who got really really rich did not do so by diversification. Imagine if Gates, Zukerberg or Bezos "responsibly diversified" the day their companies when public.
I have twice worked for companies that were lauded as the #1 gainer on the NYSE after I joined. (cause and effect???). In both cases, they eventually crashed. The last went from $105 to $4 to about $30 before it was bought out by Dell. The lesson is yesterday's winner can easily be tomorrow's loser. Also, don't believe the hype. When that stock was $105 one of the big brokerage houses published a report saying "the only risk to this stock is not having it in your portfolio.".
And finally, remember that the same firms that tell you to buy and hold have their quants running high speed trading algorithms to turn short term profits on market movements (at the expense of the buy and hold traders).
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I have a pension, paid off my mortage, and my wife has a great job. So I take more risk than most. I invest in marijuana stocks. I've done well with these. I also have a big "hedge" investment in a junior gold mine in Idaho. I got it at fifty cents and it's seventy-five cents. If gold goes to $5,000 an ounce it's supposed to go up by 5,000 %. I have 50 thousand shares, so if it pops I'll be filthy rich.
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I wanna invest also! Mostly so later down life I have money left over in case I am unable to work. Even for healthy people you never know what could happen. I am young and know nothing about it though. But the idea intrigues me. Can you guys give me some pointers? Where should I invest? How much? Basically teach me about it!
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I wanna invest also! Mostly so later down life I have money left over in case I am unable to work. Even for healthy people you never know what could happen. I am young and know nothing about it though. But the idea intrigues me. Can you guys give me some pointers? Where should I invest? How much? Basically teach me about it!
I would suggest you start with about $1M - that puts you over the threshold for special services at places like Fidelity, Schwab, Vanguard. It is better if you can start with $5M.
Avoid all fee based advisors - they will suck from your portfolio, and their recommendations are tainted by the commission structure.
Stick with the big name companies like those I mentioned. Go with "no names" or the local guy (except as an advisor only) and you risk getting Madoffed.
Read on on the "Capital asset pricing model" to learn how risk and gain are tightly linked, and you cannot descrease risk while increasing expected gain or vice-versa.
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Definitely dont have 1 million. What about something way smaller?
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Well, you did ask how much you should start with 8)
Even a couple of thousand is enough to open a brokerage account. You can choose between market wide index funds, sector funds, funds with a targeted strategy (like socially conscious funds, contra funds, small cap funds, etc.) or individual stocks. Constant investing in a few diversified mutual funds will almost certainly produce great gains over time, but can be a loser over the course of just a few years.
I invested in mutual funds throught my working life, and kept the money in after crashes. The result is I have at least twice as much in my retirement funds (probably more) than I would if I had played it "safe" and invested only in CDs.
You need to choose where to invest (which brokerage firm), then how.
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I would never "play" the market, so I work with a financial advisor from a firm whose name you'd probably recognize. He explains EXACTLY how his compensation works because he knows that his client base depends upon trust. We meet as often as I like, and he phones me every six weeks to keep me updated on economic trends and how we can manage my portfolio to take advantage of them.
To me, it is worth spending money for financial advice, but that's a personal choice.
The first thing you would need to do is to decide how much financial risk you are willing to take. This will change as your circumstances change and as you get closer to retirement.
Simon Dog is correct in saying that even a couple of thousand is enough to open a brokerage account. The longer you can keep your money invested, the greater your gains will be over time. That's another thing you will have to decide; how quickly will you need your money? Will you be able to keep it invested for at least 5 years?
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Hi Aisha! We got started with Fidelity when they handled the IRAs through our employers decades ago and we've dabbled with others, but ended up consolidating all our funds at Fidelity so I can manage them online.
Here's what I suggested to my sister, who wanted to get started:
1. Pay off your house.
2. Take your house payment every month and apply it to a mutual fund of your choice (I would start with the advice of a financial advisor at a place like Fidelity - face to face - just to get the ball rolling).
3. Read up on Mutual Funds (even "Mutual Funds for Dummies" is a decent place to start, to learn the jargon and understand things like dividends, fees, bonds, stocks, high-yield, mid-cap...). I like mutual funds because they have a manager dedicated to making them work, so I don't have to study every single company out there.
4. Once a year or so, meet with the advisor to decide whether you want more than one mutual fund, but keep plunking the house payment into the funds each month.
If you don't yet own a house, but are paying rent, it goes more slowly because you won't be able to invest as much each month, but getting into the habit of a monthly buy really helps to snowball the growth and keep you from panicking when the market does something 'spooky'. When it drops, try to buy even more (that's scary to do, but it pays).
If you work for a company that offers any kind of IRA, do that, especially if they have a company match. Same with companies that offer stock options - usually those are a win-win (you don't pay for them until you want to sell, so you just get the profit).
Hope that helps!
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To me, it is worth spending money for financial advice, but that's a personal choice.
Cash, grass or ass, no one rides for free.
If you get advice, it is not IF you pay but HOW you pay:
1. Sales commission based advisor. Avoid these.
2. Pay by the hour for advice (an honest way to get advice)
3. Mutual fund management fees
4. Mutual fund marketing fees (avoid all funds with 10b-1 marketing fees)
5. Percentage of assets management fee
Once you get to a certain level, the big firms will give you free counseling just because of #3 above. Look for CFP (certfied financial planner) or CFA (Chartered Financial Analyst - much better). Ask the advisor to disclose if he has a legal fidicuary obligation to you. Watch out for small independents who make their money selling commission based products. They will tell you such products are better than similar no-load funds. They are generally not.
I use a CFA at Fidelity who seems to be pretty good, and gets my wife over the hump of "Is this absolutely, positively guaranteed?" (insist on that and you will get low returns). When I say something like "A moderate amount of risk is appropriate for some of our funds" I am looked at like I am crazy. When the professional says the same thing, it's different.
There is no sepoarate fee because he is compensated to keeping money at Fidelity (see #3 above). He also offfered a fancy portfolio management service at .6% of assets per year, but I decided to go with one of their target year managed portfolios since I did not want to pay many thousands in fees on the gamble one Fidelity department would out-guess a different department.
If you do't have enought $$ to getgood service from a big name advisor, get into the game and contribute regularly. You may find that you have more in your later years (should you survive to reach them) than you thought possible.
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@Marilee good advice.
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Thanks for taking the time to explain it to me. So I did read some stuff online...not helpful I guess because they have classes for that and charge for it lol so they wont put valuable info online. Anyways, what do you think about investing in medical technology? This came to mind because I know this day and age we are always advancing in that area. Again, I dont know much! But eager to learn!
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:) Thanks!
I was able to retire in my early 50s because of this plan. We put nearly double payments against our mortgage month after month and got it done in 17 years instead of 30 (back when the interest rates were 7%, so that was a bundle saved), and it's amazing how fast that monthly payment then grew after we tucked it into mutual funds.
I like to suggest to folks who are considering buying a house to use a mortgage calculator to determine what monthly payment they can truly afford on a 15-year mortgage and see how much house that payment can buy (to see what price they should focus on) but then get a 30-year mortgage for that same house price. Then make double payments against the 30-year mortgage. That way, if some emergency comes up and you can only make a single payment from time to time, you're not scrambling or risking the loss of the house, and you're paying it off quickly so lots less money going toward interest. It might be less house than they want, but hey, debt-free is way better than granite countertops.
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The Marilee plan works great if you plan on working to 65, but you're a bit younger and fate says "forget that job, your new job is dialysis".
Eschew all forms of debt. Nothing on the credit card you cannot pay in full (did you know that credit card companies have a special term for people who do this ... deadbeat ... seriously). Get out of the car loan game as soon in life as possible. Now, your challenge is paying off the mortgage which you should do as soon as possible. Once that's done, set up a living trust to protect your estate from probate attorneys.
Anyways, what do you think about investing in medical technology?
I did well in a Fidelity medical sector fund (FHLC), but any sector investing has risk that it will either underperform or outperform the market. I think it's a good long term play, but would not put more than 10% of my funds in it. But then, I don't know any more than the next guy you ask.
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Hi Aisha -
I have a few thousand invested in a Medical Bio-Tech mutual fund - it's the riskiest fund I own with wild swings to it. It's not my favorite and it amounts to a very small fraction of our portfolio. I bought into it out of curiosity, but I never would have started there because of the risk and wild swings. It feels more like gambling to me than investing. But that's me - I'm kinda wimpy.
As others have mentioned, "Index funds" are a decent start in terms of cost, performance and risk. I also have a couple of mutuals that are based on "High Yield Bonds" that I like as a kind of 'backbone': They typically operate with lower fees and have monthly dividends that automatically buy more shares and the prices for the shares don't change all that much. If you just look at their price, you might say, they're not doing anything, but the dividends are actually growing the money at about 5% per year. Not dramatic, but decent to have in the mix.
There are literally hundreds of mutual funds from which to choose and about a dozen factors to consider: That's why I suggest a sit-down with a professsional from a reputable company to get started. They can help you hone in on what will likely work best for you.
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Wow didnt know it would be risky! Thanks for the input. You're right there's a bunch to choose from I need to narrow my options down.
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Wow didnt know it would be risky!
Oh yes, if you are unlucky you can loose every penny of your savings!
That said, I did quite well when the UK government privatised several nationalised industries and undervalued them at the sale.
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"deadbeat" - LOL, Simon Dog! That's us! We saved up and bought a new car with cash, and the finance guy at the dealership said, "What?! Cash? ...That's un-American!"
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"deadbeat" - LOL, Simon Dog! That's us! We saved up and bought a new car with cash, and the finance guy at the dealership said, "What?! Cash? ...That's un-American!"
I'm not making that up "deadbeat" is an industry term. The other term for such people is "Transactor".
Once you pay cash for a car, it's easy to keep doing it since you have the lifetime of the car to save up for the next one.
Investors should also educate themselves about long term capital gains - one more thing that stacks the deck in your favor. Also, be aware that PMs (precious metals) do not get the benefit of long term capital gains and any gain is taxed at ordinary income rates.
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Possibly the term "playing" should be defined as a figurative one as opposed to a literal one.
Double mortgage payments are sort of a misnomer. You pay double on the principle; the interest doesn't start to dwindle significantly for several years after making double payments. The interest is calculated at loan inception so the double payments have no effect on it.
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As I understand it, the interest on a 30-year fixed loan is recalculated each year (some are even recalculated every month). As you make extra payments against the principle, the recalculated interest is also adjusted. It's fun to play with the numbers with a calculator like this one: https://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx#testid=10413875559_control which will show what the total interest will be depending on how much extra you pay on either a monthly, annual, or lump sum basis.
For example, borrowing $200K costs about $140K in interest (at 3.8%), and gives a monthly payment of about $900. Doubling that payment drops the total interest to about $45k (I'm rounding here to save typing), saving nearly $100,000 and frees a person's finances up quickly.
(I literally cried when I saw my first amortization schedule and saw that my little $60,000 (at 7.4% back in the 1980s) house was going to actually cost me $120,000 by the time we were done paying. I knew it would never sell for that price, and even with the tax deduction, it was still a lot of money.)
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Double mortgage payments do reduce the amount of total interest paid over time.
Depending on the mortgage terms, one of two thing may happen:
1). The interest due on future payments is adjusted to reflect the lowered principle
or
2). The payment amount in future months remains the same, but actual total interest accural drops a bit faster, as does the principle you are paying down, resulting in fewer payments.
Although #1 seems better, #2 actually result in paying the mortgate off a bit faster with less total interest paid.
Many years ago, a company contacted me wanting to set me up with bi-weekly mortgage payments (resulting in 13 instead of 12 payments a year). It touted all the advantages for a modest $1000 up front fee, plus trusting them as an intermediary with my payment. In the FAQ it asked "can I do this myself". Instead of a straightforward answer of "You can just send the bank the extra money each month", they said "You may be able to do this provided you are in compliance with contract terms, federal regulations and banking law - we take care of all this for you". About as much integrity as a time share sales pitch.
Also, you do not have to send in a "double payment" - even if all you can afford is an extra $100 a month, you still come out ahead. Just check your statements to make sure the extra principle is credited.
I knew it would never sell for that price, and even with the tax deduction, it was still a lot of money.)
People often forget that they "extract value" from a house over time in the form of housing that they would otherwise have to rent. Even if you break even after 10 years in a house, you can come out ahead compared to where renting would have left you.
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True enough, Simon Dog. My hubby likes to say, "It's better to buy than rent, and better to own than buy".
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True enough, Simon Dog. My hubby likes to say, "It's better to buy than rent, and better to own than buy".
Ownership is impossible due to the lack of allodial title in the US :'( The closest you can come is renting from the government.
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Ownership is impossible due to the lack of allodial title in the US :'( The closest you can come is renting from the government.
I've never heard of this and am curious as to what you mean. Are you saying that all land in the US is owned by the government and that no citizen ever owns the freehold?
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Another way to "pay off a house"
I just wanted to share my sister's story here.
She was in her late '40s, married with 2 kids, 2 mortgages and 2 incomes when her husband suddenly died. The grief and stress made her too sick to work and she lost her teaching job. It was 2008. She was starting to say things like, "I could probably be a great bag-lady", was draining her savings to pay the mortgages and hope her health would improve enough to be able to work again. Long story short, she sold her home before defaulting on the loans, and - here's the big, bold part - she moved to another town where she was able to buy a house paid-in-full with the remaining equity from the first house. It was a huge step: She had to leave friends, a neighborhood she had known for decades, any possibility of returning to her old job. She was starting from scratch. But with the new house paid for, she could burn through her savings much more slowly, regain some health and started work again a year later. And she's able to invest because she doesn't have any house payment (sure, she's got property tax, insurance, repair and maintenance - but that's a lot less than a mortgage) so she and the kids are not on the street, and now in her late '50s she can daydream about some kind of retirement again.
We often think of downsizing as a retired senior after the kids are gone, but my sister showed that downsizing can be the right thing to do much sooner. At least it was for her.
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here's the big, bold part - she moved to another town where she was able to buy a house paid-in-full with the remaining equity from the first house. It was a huge step:
I personally feel we need much more internal migration here in the US. People like to blame the "Mexicans" (i.e. any member of a Spanish speaking culture) for taking all the jobs but they are the people willing to move anywhere in the US for a job.
I live in the DC area where there constantly are jobs (many like mine are non government) - anyone at roughly any skill level (food services, plumbing, auto mechanics, professional, healthcare, education) who is willing to work hard should be able to get a job. Yet I keep reading about people all over the country that can not find work. They should come on their own to an area with jobs, rent a bedroom in a house with others and work hard until they can afford the high cost of living and bring their loved one's with them.
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One thing that I feel most financial books push is "How to get rich," but richness is not a destination (there is always someone more rich) rather you should seek to be content and comfortable.
Sometime soon I'll quote this a post the name/link to a basic money savings (i.e. coupons are nice, but make sure you don't ruin all that savings buy overpaying on that dishwasher) book that I really liked.
To me the first step is always trying to figure out how you can live for less than you earn - and continue that as your income increases. (Plus get in a career field that will have raises and opportunity to advance.)
Once you have some free cash its time to build your emergency fund and after that move forward with other investments, first any retirement accounts at work up to the company match, then up to the annual retirement contribution limit, and after that you can talk about investing for fun. Somewhere in there you should purchase an affordable home, but only if it makes sense, and view that as your forever home - and pay down the balance when you can. Also in there you should buy a car (if you can not live with public transportation) that will be dependable for many years and keep it as long as possible.
Somewhere in there you also need to make sure you are making smart choices, like would you rather pay $150 for a internet/cable package at $1,800 year, or use "rabbit ears" and a cheaper internet package to save say $1,200/year... Or is it really worth overpaying by $300/year for a cell phone by not changing providers and plans every so often...
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I've never heard of this and am curious as to what you mean. Are you saying that all land in the US is owned by the government and that no citizen ever owns the freehold?
You pay a fee to the government each year in return for the government allowing you to live in your house instead of selling your lease to someone else who will pay that fee. They call the rent "property taxes". I pay about $8500 a year in rent (taxes) to the town for my house. It's not much compared to renting from someone else, but it's still $700 a month I pay not to be kicked out.
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Hold up, Simon Dog. Are you saying that the payment of property taxes to the FEDERAL government allow you to live in your house?
I don't think that's correct, if that's what you are saying. Property taxes go to your local city/town, and they distribute in to the various tax bodies. Do you mean to say that property taxes go to LOCAL government, perhaps? I don't want Paul to get the wrong idea.
Paul, I don't know if the UK still has council taxes like they did when I still lived there, but property taxes here are like council taxes there. They pay for schools, police, etc.
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I never said "Federal Government", just "Government". In my state, the property taxes are all local. In my previous state of NY, there was a town/city and separate county property tax.
Federal or state, the concept is the same - I pay or people wil guns force me out of my house and let someone else pay the fee to live there.
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I never said "Federal Government", just "Government". In my state, the property taxes are all local. In my previous state of NY, there was a town/city and separate county property tax.
I understand. It's just that people from other countries might read the word "government" and assume you meant the US government. In my state, too, the property taxes are all local, and I was saying to Paul, the council tax is just that...it is imposed by the local council to pay for local services, so they're analogous to our property taxes.
Thanks for clearing that up, Simon Dog.
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Paul, I don't know if the UK still has council taxes like they did when I still lived there
I believe we do, but I cannot be certain, because since I was declared disabled last year I no longer have to pay them. :P
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Sometime soon I'll quote this a post the name/link to a basic money savings (i.e. coupons are nice, but make sure you don't ruin all that savings buy overpaying on that dishwasher) book that I really liked.
I really liked this book: The Beardstown Ladies' Guide to Smart Spending for Big Savings: How to Save for a Rainy Day Without Sacrificing Your Lifestyle (https://www.amazon.com/Beardstown-Ladies-Guide-Spending-Savings/dp/0786882689)
It had good practical advice on lots of subjects as far as how to spend what money you have smartly. The Beardstown Ladies had a stock investing club and wrote a book, afterwards someone figured out their match was wrong and thus their strong investing returns were not accurate, but this book's advice still stands.