What Percentage of Net Worth Should be in Stocks, Old 401(k), Books for Buying Businesses and More! - Money Q&A
Nov 27, 2024
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Dive into the financial frontier with discussions on the ideal percentage of net worth to allocate to stocks. Learn what to do with that old 401(k) and how to strategically pay off high-interest debts like car loans. Explore recommended books for buying businesses and innovative tools for emerging entrepreneurs. Discover the nuances of international index funds and valuable investment services, while hearing inspiring success stories of individuals achieving significant financial milestones. Get equipped with actionable insights for navigating your financial journey!
32:39
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Quick takeaways
Assessing whether to pay off high-interest debt versus investing in stocks requires weighing guaranteed repayment against potential market returns.
Rolling over an old Roth 401(k) into a Roth IRA is advisable for maintaining tax advantages and controlling investment growth effectively.
Deep dives
Investing in Real Estate Made Accessible
Fundrise simplifies real estate investing by offering a flagship fund that allows individuals to start with as little as $10. As demand decreases and asset prices drop, this fund is set to expand its portfolio significantly in the upcoming months. Investors must assess their objectives and risks before committing, yet the ease of access can attract those who prefer not to manage properties directly. This approach provides a valuable opportunity for individuals to diversify their portfolios without the challenges of traditional real estate management.
Evaluating Car Loan Repayment Strategies
Deciding whether to pay off a car loan with a high-interest rate can be influenced by the performance of the stock market. For instance, an individual with a loan interest rate of 7.62% considered either paying off the loan or investing in the stock market, which had seen better returns. Experts suggest that paying off debts on depreciating assets, especially at high-interest rates, can often be the wiser choice to avoid future financial stress. The decision ultimately hinges on weighing the certainty of debt repayment against the unpredictability of market returns.
Guidelines for Managing Old 401(k) Accounts
When changing jobs frequently, knowing how to manage old 401(k) accounts is crucial for maintaining compound interest growth. It is often advisable to roll over a Roth 401(k) into a Roth IRA, allowing investors to control their investments more effectively. Utilizing services like Capitalize can facilitate this rollover process without incurring unnecessary tax consequences. By ensuring that funds are moved directly into a Roth IRA, individuals can preserve the tax advantages associated with their retirement savings.
Understanding International Index Fund Taxes
Investing in international index funds like the Fidelity Total International Index Fund typically does not require filing multiple tax returns in different countries. The fund itself manages foreign tax obligations, including any withholding taxes on dividends before they are distributed to investors. Tax credits for foreign taxes paid can be claimed on U.S. tax returns, simplifying the process for investors. This structure allows individuals to benefit from international diversification without the complexities of additional tax filings.
In this episode of the Personal Finance Podcast Money Q&A, we're going to talk about what percentage of your net worth should be in stocks, what to do with an old 401k, books for buying businesses and so much more.
Today we are going to answer these questions!
Question 1: Should I pay off my 7.72% Car Loan?
Question 2: What to do with my Old 401(K)?
Question 3: What taxes are associated with international index funds?
Question 4: Books For Buying a Business
Question 5: Stock Lending and Investment Services
Question 6: Back Door Roth & % of Net worth in stocks?
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