At this rate we will be under 3% in 2025! yes the prevailing sentiment seems to be at some point shelter will actually roll over in the data. Maybe it’s the new “transitory”.
Shelter has rolled over in the data it's just the metric that is used lags 6 months. Don't have to be snippy because you don't know things.
^reference to rates not inflation, but with the revisions to last years data and todays print inflation looking stickier than a month ago.
Team - my fiancé doesn't really have a good grasp on personal finance (her parents were not good with money) - for example she's got multiple 401k's / IRA's from past places she's worked (but can't really articulate where they are or how much they are), has credit card and personal loan debt but doesn't know the interest rates or whether she can pay off the loan early, etc....I'm half expecting her retirement accounts to be all cash vs actually invested. I've asked her to gather all information and am sitting down with her tomorrow after work to go through it and assess the situation. I also want to take the opportunity to teach and instill personal finance concepts and how we're going to manage money moving forward. I can take her through it just fine, but thought I would ask anyone if they have any thoughts on frameworks or material to use? Anyone been in a similar situation?
That’s always been my thought/concern when it comes to inflation. Sure the initial cause for it could be temporary, but if the seller can continue to sell their goods at the inflated price why would they lower it? Maybe I’m looking at it way too simple, but just seems like for a lot of stuff, the current price is the new normal (maybe +/- a small %).
It's a lot more complicated, though. Competition should drive down prices when input costs go down. We saw supply chain issues that lead to supply constraints that lead to higher input costs. When those iron out you have a couple options. You can keep selling at a certain price but only if every other party selling that same thing agrees. Inevitably someone will drop prices to try to gain market share and then you will have to follow suit unless you have some other built-in advantage or if you're in an imperfect market (oligopoly/etc). It's also highly product and market dependent.
The problem with rents in the inflation number is that raising rates to combat inflation makes financing a home buy more expensive. While it lowers housing prices through decreased demand (which isn't reflected in inflation numbers iirc), rents won't really correspond because you've just made it harder for renters to buy because financing becomes more expensive.
That’s true. I guess I was more thinking about it from some of the really large companies that seem to have the brand loyalty where people just complain about it but pay for it anyways. Obviously that’s not going to be the case with everything and as you said competition can play a bigger factor there.
Bogleheads and white coat investor do a good job laying out that indexing to the market and compound interest is the winning formula. Obviously have her combine all the errant accounts.
The idea you need to get back to pre covid baseline prices is silly imo. Only monetarists/gold bugs/now Bitcoin ideologues run with that ideology.
Someone was asking about retirement calcs, maybe Lyrtch. Found this site and starting to play with it. https://pralanaretirementcalculator.com/
Thought this was a pretty interesting conversation around taxes and early retirement. Discusses the value of taxable accounts, Roth conversions, Affordable Care Act considerations, solo 401ks and more.
PPI came in pretty hot today. Economic and inflation data for the past couple weeks all pointing towards higher for longer. In a ironic way soft landing crowd probably needed weak growth in Q1.
There’s just so little to show the fed’s hikes are doing anything too much beyond the mortgage market. Can we attribute any reduction in CPI or PPI to them at this point. I know this in a roundabout way makes me team transitory, but I’m just not seeing much that says their hikes have had a material impact on goods or services inflation. Certainly hasn’t impacted the labor market.
The short answer is rates take a long time to permeate through the real economy. On rate sensitive items like houses or autos you can see the effects fairly quickly. It takes a lot longer for rates to affect services but over time it will. Historically if you look back at past hiking cycles you don’t see recessions for 12-18 months after. But also this is all just data for this month, next month could show what January seemed to show which is rapid disinflation and weaker growth. We are currently just in the whipsaw of data and there’s alot more data from now till the end of March when the next Fed meeting is.
been a lot of discussions how seasonal adjustments are off kilter post covid (plus weather has been anomalous this year) causing some hot Q1 reads will be interesting to see if it's a blip or not. soft landing is kind of a misnomer as no landing became the hot topic. seems like hot economy for another few months and recession potential is sliding into 24 becoming the consensus. but on your post while i was typing this could be whiplash blip and return to prior december consensus soon enough
Yea it’s just taking it month by month at this point, I do think this retightening of things increases recession odds. But like I said earlier at least powell will have 2 CPI’s in a row before he makes a call. Everything looking back has been revised higher inflation wise so the picture isn’t as rosy as it once seemed. I’m not married to any one idea at this point, but softly landing this plane will be difficult.
Thanks to whoever linked the IRS 1099K FAQ document a while ago. Just skimmed it. I don't resell items using venmo etc, but was curious how they will report my receiving activity, which almost exclusively is straight reimbursements. Seems to be captured here: Q8. My friend and I went to a concert, and my friend reimbursed money to me for her concert ticket through an online application. If I get a Form 1099-K for the reimbursement, do I need to pay taxes on it? (added December 28, 2022) A8. Because the money is not payment for the sale of goods or the provision of services, generally the reimbursement would not be taxable to you. If you believe the information on Form 1099-K, is incorrect, the form has been issued in error, or you have a question relating to the form, contact the filer, whose name and contact information appears in the upper left corner on the front of the form. You may also contact the payment settlement entity whose name and phone number are shown in the lower left side of the form. If you cannot get the form corrected, the error should be reported on Form 1040, Schedule 1, Part I,Additional Income, Line 8z,Other Income, with an offsetting entry in Part II,Adjustments to Income, Line 24z,Other Adjustments. For example, if you received $800 from a friend reimbursing you for a concert ticket and you received a Form 1099-K reporting this as gross proceeds, your Schedule 1 should reflect the following: Form 1040, Schedule 1 Part I – Line 8z,Other Income. List type and amount: "Form 1099-K Received in Error.... $800" to show the proceeds reported on the Form 1099-K. Part II – Line 24z,Other Adjustments. List type and amount: "Form 1099-K Received in Error.... $800" to offset the proceeds reported to you in error. Not reporting this adjustment could result in you improperly reporting gain on the reimbursement. https://www.irs.gov/pub/taxpros/fs-2022-41.pdf
Q2. What do I do if I think my Form 1099-K is incorrect? (updated December 28, 2022) A2. If you believe the information on Form 1099-K, Payment Card and Third Party Network Transactions, is incorrect, the form has been issued in error, or you have a question relating to the form, contact the filer, whose name and contact information appears in the upper left corner on the front of the form You may also contact the payment settlement entity whose name and phone number are shown in the lower left side of the form. If you cannot get the form corrected, the error should be reported onForm 1040, Schedule 1, Additional Income and Adjustments to Income, Part I, Additional Income, Line 8z, Other Income, with an offsetting entry in Part II, Adjustments to Income, Line 24z, Other Adjustments.
No specific advice other than saying youre doing the right thing. Follow-through with it, it’s important. I didn’t and finances became a huge problem in my marriage. I’m since divorced.
The new regs got pushed for a year so it shouldn't be an issue this year (tax year 2022) for most people.
Noticed my HSA contribution went up a little bit. Then discovered the contribution limit went up to $3,850 for single.
I should've clarified- I'm not using actual money yet. I'm practicing on Investopedia with their simulator.
Word to the wise: it is very easy to convince yourself that you are some sort of genius when you are playing with fake money and then completely wet the bed when you have actual dollars at stake. At least that's what a friend told me.
Very true. It's similar to gambling. I talk a big game when I don't have my actual money on the line. When I got o make actual bets, they are much more humble.
Think or swim has paper trading on the desktop and mobile apps. Probably a better interface but I haven’t used investopedia’s simulator since 2014.
I suck at math is there a good online calculator that will help me understand the impact of "Expense Ratio" in long-term 401k account? Like what does 0.50% vs 0.05% mean for 20 years of holding those funds
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator feds got you covered
being able to calculate and compare based on expense ratio is cool now I can say ok so how much better does the 0.5% fund have to perform compared to the 0.1% fund to be worth it
$100k compounded annually at 8% pre fee return is about $37k difference over that time. It’s why folks need to take look at their 401k fees (and other factors like tax bracket and retirement age) before contributing over a company match.
Sooooo do I sell my Sigma Lithium stock now that there are early rumors that Tesla is interested in buying them out? Or do I wait a while longer to see if a bunch of Elon dorks start buying the shit out of it?
For sure. A bit annoyed about the Tesla acquisition possibilities, because I purchased due to all of their environmental standards they are in the process of getting in place. And I’m sure if Tesla buys before the final product is up and running, it might all get tossed right out the window. Still seems like there is a ton of growth possibility, though, given that they aren’t even up to full production yet, and camping on a massive deposit.
weird time right now, more indicators the hot january reads aren't a blip, trending towards 3.x inflation yoy still but getting into the 2's going to be a journey. could be lots of chop for a few months, terminal rate maybe north of 5% now, but also big gdp numbers anticipated. real wages positive last i looked. also consumer sentiment about the economy booming to highs we really don't know what to do with our hands in this economy