Comments on: A Few More Random Things About Investing

By: Geof F. Morris

Geof F. Morris — Thu, 26 Feb 2009 01:29:46 +0000

Yeah, I’m with Stephen … which is why I’m for health care reform.

By: Stephen

Stephen — Tue, 24 Feb 2009 16:48:13 +0000

Yoon, that’s the thing that scares me the most. Last I looked, half of all personal bankruptcies were due to medical bills dumping people in a hole that they then couldn’t get out of.

By: Yoon Ha Lee

Yoon Ha Lee — Tue, 24 Feb 2009 16:22:51 +0000

Misty: What kills me is that I agree with what I’m seeing of the basic philosophy behind that website. We were *doing* these things, approximately: we had an emergency fund; we paid off my grad school loans. Then we had two emergencies in a row, more or less: unplanned pregnancy (hi, lizard!), which would have been deal-with-able if not for the second emergency, which was (if you clump things together) my getting diagnosed bipolar. The hospital &c. fees completely wiped out the emergency fund (MIT grad student health insurance is fine if you are *in Boston* but does not cover a lot of things if you are out of state; naturally, in order to do his research, Joe had to be out of state). In the department of not helping, the being-bipolar has made a full-time job inadvisable at this point in time. We have tried to cut back expenses, and fortunately the only debt left is my unfortunately large college debt (Joe got out of college without debt, lucky guy), and we are managing to squeak by, but it is kind of scary how quickly everything went down the toilet once the various medical fees hit us.

Anyway, thanks for the link–nifty site.

By: Stephen

Stephen — Tue, 24 Feb 2009 02:49:14 +0000

Jota: plus you’ve got to actually increase your traditional IRA contributions by the amount you’re saving in tax, which tends to run against human behavior.

By: Geof F. Morris

Geof F. Morris — Tue, 24 Feb 2009 02:33:16 +0000

Jota: Yes, but you’re essentially rating the risk of taxation costs changing over time. If you think that you’re going to be in a higher tax bracket later on, or that capital gains taxes will rise in the future, then maybe you pay a little tax now rather than a lot later.

By: Jota

Jota — Tue, 24 Feb 2009 00:33:22 +0000

The rule of thumb I always see is that, for most everyone, Roth IRAs are better than traditional ones. You’re putting money in your IRA hoping that it’ll grow. With a traditional IRA, you have to pay taxes on those profits. With a Roth IRA, you don’t.

But isn’t it true that if you don’t pay taxes when you put them money in, that leaves you with that much more money that you can invest? The more money you can put into the account, the more you can collect compound interest on, so the more it’ll grow.

By: Missy

Missy — Mon, 23 Feb 2009 23:10:07 +0000

For those who are interested in getting out of debt, check out Daveramsey.com. There is a lot of good, free information on making a budget, creating a plan for getting out of debt, saving your emergency fund, etc.

By: Stephen

Stephen — Mon, 23 Feb 2009 20:01:03 +0000

Yeah, a lot of people I know are in y’all’s position. Goodness knows we were back in my grad school days.

By: Yoon Ha Lee

Yoon Ha Lee — Mon, 23 Feb 2009 19:35:05 +0000

Heh. This is very interesting to read, although in our case it is sadly academic. (The short version is we don’t even have a 3-6 mo. emergency fund and one isn’t happening anytime soon, so investing stuff is Right Out.) On the other hand, I want to know about this stuff in case that situation changes someday…