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Forum » investing in stocks to get a house?
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Thread: investing in stocks to get a house?

post 1674216143 01-05-2023, 09:49 PM
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investing in stocks to get a house?

is it worth it after capital gain taxes etc to put all my extra cash (Besides an emergency fund) in the stock market

my income is too low and can only save maybe 15k per year on my best behavior

not sure if I can use my roth either, because I already bought a property before, even though it's not a house it had a old ass house on it

anyways I'd like to save maxx and hopefully find a healthcare job in the middle of nowhere where I can get a small house for like 150k cash. now I live in an RV and it sucks ass
post 1674217123 01-05-2023, 10:09 PM
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bump
post 1674217273 01-05-2023, 10:11 PM
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Yes, it's worth it. Capital gains are only on the profit. So you are still ahead. Hold it long enough and it will be taxed at a lower rate.

Also, are you saving for retirement? Put some of that into an IRA.
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post 1674217303 01-05-2023, 10:12 PM
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I’d be very careful investing these days.

Go in only like 10% of your sheit on the biggest red days, and wait for Powell to pivot.
post 1674217453 01-05-2023, 10:16 PM
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Originally Posted By kusok⏩
I’d be very careful investing these days.

Go in only like 10% of your sheit on the biggest red days, and wait for Powell to pivot.
surely you can't go wrong though in some blue chip/traditional mutual funds though?

my thought is

A. bullmax
B. just wait until bullmaxes again (with my time horizon) about 5 years

pretty much at a discount now
post 1674217543 01-05-2023, 10:18 PM
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Originally Posted By GreenWave1⏩
Yes, it's worth it. Capital gains are only on the profit. So you are still ahead. Hold it long enough and it will be taxed at a lower rate.

Also, are you saving for retirement? Put some of that into an IRA.
hardly any, whats the point I'll probably be dead before I can save enough to retire. I know I should be but that will take away from getting a house RN. Best I could do is max out a roth which isn't much 5k a year. Would you recommend that?
post 1674217583 01-05-2023, 10:18 PM
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The S&P500 has averaged about a 10% annual return over its lifespan. There will be good years and bad years, but that's basically what you're looking at long term. If you have extra money to invest, just throw it in an ETF indexed to the S&P500 (like SPY) and let it sit. Don't freak out when the market swings.

I don't know what you're talking about with your Roth--it has nothing to do with home ownership. The difference between a Roth IRA and a traditional IRA is that Roth contributions areaftertax, whereas contributions to a traditional IRA are deducted from your taxable income. When you withdraw from your IRA in retirement, you pay taxes at that point if it's a traditional IRA. If it's a Roth, you don't pay taxes when you withdraw.

So what does that mean in simple terms? If you make less money now then you think you will be withdrawing in retirement (i.e. you are in a lower tax bracket now), then invest in a Roth IRA (i.e. pay the income taxes now rather than later). You can contribute up to $6500 annually to an IRA, so you should definitely max out your IRA contribution every year and then invest whatever else you can. Do you have a 401k with your employer?


Edit:OP, look into FHA loans for buying a house. If you qualify, it only requires like a 3.5% downpayment instead of 20%. Or just join the military for the next 4 years and get a VA loan lol
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post 1674217643 01-05-2023, 10:19 PM
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sir this is a casino
post 1674217663 01-05-2023, 10:20 PM
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yes,always choose to enter
when their is a deep correction.
post 1674217713 01-05-2023, 10:21 PM
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Originally Posted By MattyMiscer⏩
The S&P500 has averaged about a 10% annual return over its lifespan. There will be good years and bad years, but that's basically what you're looking at long term. If you have extra money to invest, just throw it in an ETF indexed to the S&P500 (like SPY) and let it sit. Don't freak out when the market swings.

I don't know what you're talking about with your Roth--it has nothing to do with home ownership. The difference between a Roth IRA and a traditional IRA is that Roth contributions areaftertax, whereas contributions to a traditional IRA are deducted from your taxable income. When you withdraw from your IRA in retirement, you pay taxes at that point if it's a traditional IRA. If it's a Roth, you don't pay taxes when you withdraw.

So what does that mean in simple terms? If you make less money now then you think you will be withdrawing in retirement (i.e. you are in a lower tax bracket now), then invest in a Roth IRA (i.e. pay the income taxes now rather than later). You can contribute up to $6500 annually to an IRA, so you should definitely max out your IRA contribution every year and then invest whatever else you can. Do you have a 401k with your employer?
You can use a roth for downpayment I believe, but only if you never bought a 'House' before

Pretty sure they have a 401k but it's more money gone from a limited supply. I bring home 800 per week, with any luck I could get that up to 1000 in a few years. But growth in my field is limited
post 1674217733 01-05-2023, 10:23 PM
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Originally Posted By Azrairc⏩
hardly any, whats the point I'll probably be dead before I can save enough to retire. I know I should be but that will take away from getting a house RN. Best I could do is max out a roth which isn't much 5k a year. Would you recommend that?
The house should probably be your priority. If you can save 15k per year and can get a house for 150k, then you should have a down payment in 2 years. You can wait that long to save for retirement if it improves your living situation significantly.
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post 1674217753 01-05-2023, 10:23 PM
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Make more money.
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post 1674217853 01-05-2023, 10:28 PM
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I think you can use the Roth route again after 5 years, not sure though. If you have a 401k you can take a loan out against it if it makes sense too.

But yeah the price of a house will loosely follow the prices of equities and if you just save cash the value will be inflated away at 4%+ a year and the value of properties will increase at the same rate so you’re better off putting it in stonks.
post 1674217893 01-05-2023, 10:29 PM
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Try G4P & G = profit
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post 1674220023 01-05-2023, 11:30 PM
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Originally Posted By Bluestar92⏩
I think you can use the Roth route again after 5 years, not sure though. If you have a 401k you can take a loan out against it if it makes sense too.

But yeah the price of a house will loosely follow the prices of equities and if you just save cash the value will be inflated away at 4%+ a year and the value of properties will increase at the same rate so you’re better off putting it in stonks.
Roth's are badass. You don't need to wait, nor worry about penalties, nor taxes if it's principle. Earnings are a different story. If you've steadily put cash in for years and years you might not have to touch earnings.
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post 1674224783 01-06-2023, 02:00 AM
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yes, worth it. I worked as a contractor in Saudi for a decade. I did contribute to an IRA (roth wasn't an option at the time), and most of my investments were in taxable accounts. The cap gains taxes weren't much, buy and hold mostly. So when I came back to the USA I bought a couple of vehicles with cash, substantial downpayment on a house, furnishings, and a good base for my kids college fund (that grew to a quarter mil by the time they went to school)

yeah, it's worth it
post 1674227173 01-06-2023, 03:40 AM
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after losing 75% of my portfolio i would say stick to index fund. very few beat the market
post 1674231303 01-06-2023, 05:34 AM
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Sounds like you should look into a USDA loan.
post 1674274833 01-06-2023, 06:18 PM
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Originally Posted By Azrairc⏩
You can use a roth for downpayment I believe, but only if you never bought a 'House' before

Pretty sure they have a 401k but it's more money gone from a limited supply. I bring home 800 per week, with any luck I could get that up to 1000 in a few years. But growth in my field is limited
Yeah, I did this with my 401k. It was 10k and only for first-time homebuyers. You want to do it with a traditional, not a Roth. A roth is already taxed so there is no real benefit. A traditional 401k is pretax so you never have to pay tax on that 10k.
post 1674275253 01-06-2023, 06:25 PM
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Here’s a scenario
Do you choose a or b
40% of my liquid cash to invest
Some of this is kids college fund, some mine

1. High yield savings account paying 3.3%. These returns are taxed at normal income tax rates. FDIC insured, no risk

2. Stock, MO, cigarette stock, pays 8.3% dividend. These returns are taxed at a lower rate than A. Also, I have about 40% of my liquid cash already in this investment
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post 1674275563 01-06-2023, 06:31 PM
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Originally Posted By 5x10⏩
Here’s a scenario
Do you choose a or b
40% of my liquid cash to invest
Some of this is kids college fund, some mine

1. High yield savings account paying 3.3%. These returns are taxed at normal income tax rates. FDIC insured, no risk

2. Stock, MO, cigarette stock, pays 8.3% dividend. These returns are taxed at a lower rate than A. Also, I have about 40% of my liquid cash already in this investment
Why not do a 529 plan instead?
post 1674275583 01-06-2023, 06:32 PM
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The truth is OP, given the current economic conditions and what the fed has done, you will now never save your way into wealth. What's better than anything else right now is purely cash flow. Increase your income. I would get a new job that pays more or start a company with that money and increase cashflow. Inflation will eat away at your saving potential so you need to out earn it instead right now.
post 1674275793 01-06-2023, 06:36 PM
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Originally Posted By dyee4613⏩
Why not do a 529 plan instead?
not a fan of the investment options

With 1 years dividend returns, I can pay for a years worth of tuition
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post 1674320513 01-07-2023, 01:21 PM
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Originally Posted By dyee4613⏩
Yeah, I did this with my 401k. It was 10k and only for first-time homebuyers. You want to do it with a traditional, not a Roth. A roth is already taxed so there is no real benefit. A traditional 401k is pretax so you never have to pay tax on that 10k.
The benefit to the ROTH is you can pull unlimited funds (as long as they're principle and not returns). Steadily plow $7k a year for 3 years and you'll have the $21k to pull out, still have the gains in your account + zero tax consequences + still able to pull from 401k for house. Assuming the market doesn't take a massive dump lol.
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post 1674321403 01-07-2023, 01:49 PM
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Originally Posted By -JR⏩
The benefit to the ROTH is you can pull unlimited funds (as long as they're principle and not returns). Steadily plow $7k a year for 3 years and you'll have the $21k to pull out, still have the gains in your account + zero tax consequences + still able to pull from 401k for house. Assuming the market doesn't take a massive dump lol.
I'm missing something here. Please correct my potato math. Let's use 10k as an example and just use 20% for taxes to make it easy.

401k: 10,000 (from paycheck) --> 10,000 (goes to 401k) --> 10,000 goes to home downpayment
Roth: 10,000 (from paycheck) --> 8,000 (goes to roth) 2,000 paid as taxes --> 8,000 goes to home downpayment

In this situation, you lost 2k no?
post 1674321823 01-07-2023, 01:59 PM
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Originally Posted By 5x10⏩
Here’s a scenario
Do you choose a or b
40% of my liquid cash to invest
Some of this is kids college fund, some mine

1. High yield savings account paying 3.3%. These returns are taxed at normal income tax rates. FDIC insured, no risk

2. Stock, MO, cigarette stock, pays 8.3% dividend. These returns are taxed at a lower rate than A. Also, I have about 40% of my liquid cash already in this investment
I'd probably go with 2.

I wouldn't put it all in one stock. I'd probably look into adding QQQX and JEPI. Maybe research a few other high dividend payers. I forgot the youtube name now but there was a guy who used those two etfs and maybe a few other single stocks and he's averaging a 10-12% dividend.

Yes its risky. But the idea of a consistent 10-12% returns (even in this market) with risk is more appealing to me personally then a 'safe' 3% return. I'd only keep dry powder for further crashes/dips in the savings account.



I didn't move to any dividend players like that when the crash started and I kind have wished I would have.
post 1674321843 01-07-2023, 01:59 PM
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navy fed is doing a 5% CD starting monday. i think it's either 12 or 18 months. Probably going to put some cash in that.
post 1674324283 01-07-2023, 03:01 PM
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Are there no other tax-free accounts available in the US with fewer restrictions?

I used a TFSA (tax-free savings account) for this exact thing last year here in Canadaland
post 1674330253 01-07-2023, 05:02 PM
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Originally Posted By dyee4613⏩
I'm missing something here. Please correct my potato math. Let's use 10k as an example and just use 20% for taxes to make it easy.

401k: 10,000 (from paycheck) --> 10,000 (goes to 401k) --> 10,000 goes to home downpayment
Roth: 10,000 (from paycheck) --> 8,000 (goes to roth) 2,000 paid as taxes --> 8,000 goes to home downpayment

In this situation, you lost 2k no?
You can pull whatever youput into a Roth 100% tax free. Roth contributions are post tax (already taxed) contributions. The benefit is you don't have to pay taxes when you retire. Pulling returns is taxed unless you use the $10k first time home buyer exemption (or retirement age).
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post 1674330613 01-07-2023, 05:11 PM
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just buy an investment property then after a while 1031 that b*tch
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