Bud Selig: "I'm the worst commissioner ever"
Rob Manfred: "Hold my beer"
https://redsintelligence.com/smforum/index.php
I hear you. I personally could not stomach watching the huge swings of my overall number. I *had* to find another way to go about it.
If the system tanks, I am not sure there is anywhere safe, so I am putting my head in the sand and pressing forward. I didn't get started until I was 26 and I started from a place of genuine financial ignorance so I am still making up for lost time. I'd like to eventually own some hard assets (Land, etc.), which might help buffer form a real deep crisis, but that is not in the near term.
Good luck out there.
kaldaniels (07-31-2020)
This has been one of the best off-topic threads on Redszone IMO. I really love the information I've gathered over the years. I'm thinking about starting this for my daughter (7 year old). This would be in addition to her 529 account. Can anyone point me to some helpful resources?
How do we know he's not Mel Torme?
Sounds like you might want to set up an education IRA, aka a Coverdell account or an ESA (education savings account). You can have both an esa and a 529. There are some differences, though. For example, the contribution limit is much lower ($2,000/yr) but there's a lot more flexibility in how the money can be invested and what expenses are covered. While the investing options in a 529 are similar to a 401k (mostly generic target funds) an esa can include mutual funds, etfs, and individual stocks. I started a couple esa's for a nice/nephew a few years ago at Schwab.
https://www.savingforcollege.com/art...-coverdell-esa
https://www.fool.com/retirement/2016...ation-ira.aspx
https://www.schwab.com/educational-savings-account
Last edited by redsfandan; 02-02-2021 at 12:59 AM.
Second this. I also set some of these up for family members. There are income limits on the annual contributions (so if the contributor makes more than X for the year, they can't make the contribution that year), HOWEVER, anyone can make a contribution to the ESA (a sibling, aunt uncle, even the beneficiary themselves), so you can give them the money and they make the contribution. A beneficiary cannot get more than $2000/yr in contributions in aggregate to their ESA (coverdell).
Not sure if that was clear, but redsfandan's links probably explain it better.
"A person is smart. People are dumb, panicky, dangerous animals and you know it."
http://dalmady.blogspot.com
wolfboy (02-02-2021)
Thanks. We're not eligible, but I'll look into it as an option for family members. As to my original post, I was thinking of this as more of a nest-egg investment for my daughter separate and aside from education savings. I don't think I made it all that clear in my prior post.
How do we know he's not Mel Torme?
wolfboy (02-02-2021)
I wouldn't necessarily be looking for dividends in an account for your daughter. Depending on how in tune you are with the stock market, it might be worth just throwing the money into a large cap growth fund. I have a good portion of my IRA in FSPGX, among other funds and individual stocks. I think it does pay a dividend twice per year. Companies like Microsoft and Apple are still good targets for growth and dividend income. I have a large portion of my funds in those two. A little more risky, but Ford has a lot of upside right now. Expect it to go up even more once the dividend is reinstated. Same for GM.
wolfboy (02-02-2021)
This is the second good size drop in the markets since I began investing almost exclusively in Dividend paying (and dividend growth) stocks. My holdings are down significantly less (YTD: -3.5% vs 16.1% S&P) than the market index and my dividend income continues to grow.
I suspect there is a decent chance we have a good drop in front of us. I am generally all in on the market at all times, but I have about 5% in cash at the moment. I think there are some accidental high yielders to be had in the coming months. I have a few limit orders set to buy if a few of my targets can participate in that drop.
I am considering turning off my DRIP and collecting the dividends in cash. I now have enough coming on a regular basis that this may be worth the time commitment to eval stocks and direct these funds to hand-selected stocks as opposed to automate DRIP. Still debating this as I default towards autopilot if I can since that gets money into the market the fastest.
GL
We're in the fortunate position that we can seed a Roth IRA for our late-teens daughter. The deal is whatever she earns, she keeps. We match what she earns up to the $6k max annual contribution in her Roth. I've done some basic math for her that shows what happens if she graduates college with something as meager as $15k in a Roth at age 22.
Sticking the money in an index fund and letting it ride. So hopefully in 50 years when we're long gone, she will admit that her parents did actually know a few things.
Bud Selig: "I'm the worst commissioner ever"
Rob Manfred: "Hold my beer"
https://redsintelligence.com/smforum/index.php
Might be a good idea to bump this and check in.
Money market type funds can be found right now that are paying 5 percent yields so keep that in mind.
But several lagging stocks are paying high yields….I noticed 3M at 6%, Verizon at 7% to name a couple.
Any thoughts?
The only tidbit of advice that I ever received about dividends is that "chasing them is foolish." I interpreted that as buying and selling just for dividends. I guess some people get trapped doing that.
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