Hey y’all! I have been thinking that this community could use a weekly discussion thread. Feel free to comment below with anything and everything money related that is better suited to a conversation or a quick question and answer than a full post. Some ideas include:

  • Journaling about an ongoing job search
  • Asking for ideas about how to manage an emergency fund
  • Logging recent stock trades
  • Talking about the impact of inflation on your budget
  • Your plans for maximizing the rewards on a credit card

Again, those are just suggestions, if there’s really anything you’d like to talk about related to finance in your life, feel free to put it here.

  • Yote.zip@pawb.socialEnglish
    1·
    1 year ago

    Would you care to explain the tax loss harvesting point? Is it just that the fund price drops a bit post dividend and you can squeeze out a bit more “loss”?

    TLH in a nutshell is just that you sell a stock for less than you bought it for, then turn around and buy a near-identical stock to keep your position in the market. So for example If I buy VTSAX for $100, and 5 months later it’s worth $80, I will sell VTSAX for $80 and use that to buy $80 worth of VFIAX. VTSAX is total american market index, VFIAX is S&P 500 - they’re effectively the same thing, but they’re different enough that they don’t count for a wash sale. What this ultimately does is allow me to claim -$20 on my income that year and pay less taxes, while losing no actual equity in the market.

    When selling/buying stocks for TLH you ideally pay attention to qualified dividends, meaning that you need to own a stock 60 days before its dividend date to get qualified dividends. Most vanguard funds pay out dividends every 3 months, so there’s a ~30 day window where you can shuffle stocks around and still acquire qualified dividends status before the next dividends hit.

    There’s a handful of gotchas you need to be aware of when doing TLH, mainly revolving around wash sales, so I would recommend you read a real guide if you’re gonna try it: https://www.whitecoatinvestor.com/tax-loss-harvesting/

    It’s a small optimization, mainly worth doing all at once when there’s a big market downturn. If I can claim like 10-20k worth of losses at once I’ll do it. I’m not going to TLH over $300. I personally have a calendar reminder every 3 months to check the market and determine if I should TLH. My reminder is coming up this week, but the market is doing well so nothing I’ve bought has lost any value.

    There are still some good credit card bonuses out there. I am working on assembling the Chase Trifecta, and right now that involves using the Freedom Unlimited card on all groceries to get 5% back. I don’t think that promotion is still going, but I am pretty sure that both the Freedom Unlimited and Freedom Flex are offering $200 back on $500 in the first 3 months, though you do have to be careful about really churning them because I think Chase gets mad if you apply to too many cards in a certain time frame.

    I’ve got two freedom cards already unfortunately (old freedom, freedom flex). I don’t really do the points cards because I don’t travel much. I’m under 5/24 by a ways at this point so I don’t think Chase would be too mad if they had any other cards that I cared about. But otherwise I’ve got like 14 credit cards and I’ve done all the good ones at this point. Cancelling and reapplying might the best option at some point, but like I said I find it hard to care about that level of effort for $100 sometimes.

    As far as FI/RE goes, on Beehaw at least that community is mixed in with general finance. I think we’re just about the size to start having a viable general finance community, and if we split it up we would see even less activity.

    Yeah true. This general thread is a good idea, since everyone’s at a different point in their financial journey, and interaction on dedicated posts might be low.