Author Topic: Roth IRA, Solo 401k, Roth 401k, IRA....I Just Don't Understand!  (Read 1375 times)

Seamster

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Hello.  I have been reading since December about where to transfer my appx $50k in the 401k from my old job.  I don't want to leave it in there because I don't like any of the investment fund.  In fact, they are all in the red this year.  Mine is in the cash account so I'm at 0%, the absolute best option in 2022 so far.

What I want to do is transfer the money to another plan/entity (?) and invest in what I want to invest in without paying taxes on the initial money or earnings.  I found some options that let me invest in stocks, but I also want the option to take the money out, buy a piece of real estate, gold, Bitcoin, etc., whatever I feel is undervalued. 

What would be the best option for me?  Thanks!


MDM

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Re: Roth IRA, Solo 401k, Roth 401k, IRA....I Just Don't Understand!
« Reply #1 on: March 03, 2022, 03:18:44 PM »
What would be the best option for me?
Probably some version of a Three-fund portfolio that you buy and hold.

But to do what it seems you desire, a Self-Directed IRA (SDIRA) may be of interest.

See also Callan periodic table of investment returns.

seattlecyclone

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Re: Roth IRA, Solo 401k, Roth 401k, IRA....I Just Don't Understand!
« Reply #2 on: March 03, 2022, 03:21:34 PM »
Most investments are in the red this year. That's part of the deal investing in the stock market: sometimes it goes down. Just because your cash is the best-performing investment in the plan this year doesn't mean cash is a good long-term investment (it's not), or that your company plan is a bad one (it might be! but short-term performance of the investments doesn't tell us that).

To avoid paying tax on the money when you move it you'll need to put it into an IRA, or perhaps roll it into your new employer's 401(k). There is such a thing as a "self-directed IRA" that will let you invest in things such as real estate and precious metals. Frankly, your initial post suggests you have nowhere near the investment expertise required to even consider such an arrangement. Read JL Collins introduction to how investing works, and put your money in index funds until you can articulate a better reason to go into alternative investments than "my 401(k) is in the red this year."

Arbitrage

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Re: Roth IRA, Solo 401k, Roth 401k, IRA....I Just Don't Understand!
« Reply #3 on: March 07, 2022, 10:37:16 AM »
Hello.  I have been reading since December about where to transfer my appx $50k in the 401k from my old job.  I don't want to leave it in there because I don't like any of the investment fund.  In fact, they are all in the red this year.  Mine is in the cash account so I'm at 0%, the absolute best option in 2022 so far.

What I want to do is transfer the money to another plan/entity (?) and invest in what I want to invest in without paying taxes on the initial money or earnings.  I found some options that let me invest in stocks, but I also want the option to take the money out, buy a piece of real estate, gold, Bitcoin, etc., whatever I feel is undervalued. 

What would be the best option for me?  Thanks!

Sorry, I'm not answering your question directly (there is a post above that gives you the answer I would've), but your post is a huge red flag.  Investing in what 'you feel is undervalued' is a terrible idea for 99% of investors.  Unless you're Warren Buffett, or a professional fund manager with decades of experience, information, contacts, unique position in the markets, unlimited time for research between yourself and your employees, etc...you're at a huge disadvantage and playing a loser's game. 

I'd recommending backing up, starting with the basics, and reading a book or two on prudent investing.  The Bogleheads' Guide to Investing, A Random Walk Down Wall Street, The Simple Path to Wealth, etc.  This is your future; you can afford to take a few hours to research how to do it in a prudent manner.

Seamster

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Re: Roth IRA, Solo 401k, Roth 401k, IRA....I Just Don't Understand!
« Reply #4 on: March 23, 2022, 08:04:57 AM »
Frankly, your initial post suggests you have nowhere near the investment expertise required to even consider such an arrangement. Read JL Collins introduction to how investing works, and put your money in index funds until you can articulate a better reason to go into alternative investments than "my 401(k) is in the red this year."
You misquoted me.  I didn't say or infer that in the OP.  I said that cash has been the absolute best option in the 401k.
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There is such a thing as a "self-directed IRA" that will let you invest in things such as real estate and precious metals.
Thanks.  I will look into this.  That's what I want.
Sorry, I'm not answering your question directly (there is a post above that gives you the answer I would've), but your post is a huge red flag.  Investing in what 'you feel is undervalued' is a terrible idea for 99% of investors.  Unless you're Warren Buffett, or a professional fund manager with decades of experience, information, contacts, unique position in the markets, unlimited time for research between yourself and your employees, etc...you're at a huge disadvantage and playing a loser's game.
I'll have to disagree with you here.  I think the growth stocks, RE, and crypto has had their run.  Yes, the Fed is trying to prevent them from crashing, but the smart money is already sitting in metals, cash, agriculture, carbon, etc.  Eventually the irrationality (or the US dollar) will come to an end. 
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I'd recommending backing up, starting with the basics, and reading a book or two on prudent investing.  The Bogleheads' Guide to Investing, A Random Walk Down Wall Street, The Simple Path to Wealth, etc.  This is your future; you can afford to take a few hours to research how to do it in a prudent manner.
Thanks, but I already  study investing for 2-3 hours per day and have for the past 10 years. This is why I want that money out of there: I've been sensing the end of the bull-market in stocks and in a bull market I can't make money on the funds they offer.  I'll post some of my options below (scroll right to see how they've dropped since Jan 1).
« Last Edit: March 23, 2022, 01:25:40 PM by Seamster »

seattlecyclone

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Re: Roth IRA, Solo 401k, Roth 401k, IRA....I Just Don't Understand!
« Reply #5 on: March 24, 2022, 01:08:21 AM »
Frankly, your initial post suggests you have nowhere near the investment expertise required to even consider such an arrangement. Read JL Collins introduction to how investing works, and put your money in index funds until you can articulate a better reason to go into alternative investments than "my 401(k) is in the red this year."
You misquoted me.  I didn't say or infer that in the OP.  I said that cash has been the absolute best option in the 401k.

Cash has probably been the best option in most 401(k) plans YTD. That's what happens when the stock markets go down. It's part of the cycle. As I said before, this fact is not sufficient reason to move your money out of your 401(k).

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I'll have to disagree with you here.  I think the growth stocks, RE, and crypto has had their run.  Yes, the Fed is trying to prevent them from crashing, but the smart money is already sitting in metals, cash, agriculture, carbon, etc.  Eventually the irrationality (or the US dollar) will come to an end.

LOL. In one sentence you say cash is where the smart people are putting their money, and in the next sentence you predict our currency has a reasonable chance of imploding. Which is it?

Look, if you're better at predicting when the stock market will go down and back up again than all the people pulling in million-dollar bonuses on Wall Street, you have the potential to become very rich indeed. The way to these riches is not through simply pulling your money into cash; that's an amateur play. If you're so convinced the stock market is over, make some options bets to that effect. Much better return...if you're right. Best of luck to you in this endeavor.

Seamster

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Re: Roth IRA, Solo 401k, Roth 401k, IRA....I Just Don't Understand!
« Reply #6 on: April 20, 2022, 11:44:46 AM »
I meant that in the case of a crash in the near future cash will be king but in the long run it will continue losing its value.

And yes, I of course will invest in what I think are the best options and hope i chose wisely.

RyanAtTanagra

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Re: Roth IRA, Solo 401k, Roth 401k, IRA....I Just Don't Understand!
« Reply #7 on: April 21, 2022, 11:56:50 AM »
Thanks, but I already  study investing for 2-3 hours per day and have for the past 10 years.

But you don't know how an IRA and 401k works?  I call BS.  As the others have said, you need to step back and recognize that you don't know some magic formula that others haven't already thought of a million times before you, and go back the basics until you understand them.