[-] [email protected] 1 points 6 hours ago* (last edited 6 hours ago)

No. But you can have government/societal protections for sharing an idea.

I personally think IP law should have a fairly limited duration, only long enough for the holder to establish first mover advantage as a reward for publicly sharing details. Initial ideas:

  • copyright - revert to the original 14 year duration (in the US), and consider going lower (like 10 years); derivative works should be encouraged
  • patents - 5-7 years from application, one time renewal if it takes longer to bring to market
  • trademark - current rules are fine, they're basically protecting against fraud

But none of this concerns ownership, but instead legal protections for sharing.

[-] [email protected] 4 points 6 hours ago

Mine was accurate in terms of IP, network, etc (I checked on my phone's data plan), but the torrents made no sense. I clicked on one and it had a list of IPs, and none were associated with mine.

I'm guessing it's all made up nonsense, outside the IP address itself. Granted, it's possible people are torrenting large files on my carrier's data plan, I just don't think it's likely so much has been downloaded in the last day or so with this IP.

Your site looks more reasonable, OP's looks kinda sketchy.

[-] [email protected] 3 points 7 hours ago

Do you have to use their router? Can you buy and configure your own?

[-] [email protected] 3 points 19 hours ago

I write Python and Typescript with full typing for my day job, and it's pretty nice. Here's the general workflow:

  1. Add some code without typing
  2. Iterate on 1 until it works properly
  3. Add tests and types
  4. Submit code for review

In development I get the benefit of most of the types being specified, but I don't need to specify everything until I'm done. I much prefer Python to Typescript, but my hands are tied on the FE.

If I needed better performance though, I'd write in Rust, which is actually what I use for most of my hobby projects.

[-] [email protected] 1 points 21 hours ago

I meant for the private and cached packages, not a full mirror. Having at least dark mode on all parts of the UI, not just the docs, is nice, and I wish crates.io supported it.

I don't care about dark mode enough to mirror all of crates.io, I'd rather just use a browser addon on to toggle the background and text.

[-] [email protected] 9 points 1 day ago* (last edited 1 day ago)

Cool, so that means I can uninstall their spyware nonsense and just use the VR bits I want? Oh, it's not that kind of "open"? Then no thanks, and screw you Zuck.

[-] [email protected] 18 points 1 day ago* (last edited 1 day ago)

I'm not sure what your definition of "older" is, but I'm past my 20s so I probably qualify.

I really like my Steam Deck. I have a Switch as well, but I only use it for exclusives. The Deck is great because it lives next to my bed and I can easily pick it up and play pretty much anything on it.

I used to love my desktop PC, but I keep feeling like I should be productive instead of playing games when I'm on it, and it's just not as comfy as laying in bed.

Then again, I'm a grumpy Linux user since 15-ish years, so using locked down consoles is offensive to me.

[-] [email protected] 3 points 1 day ago

Close.

Bikes belong on streets where cars are forced to slow to the speed of bikes (like 20mph/32kph max) and pedestrian have right of way. So places like your city's downtown with small shops and whatnot, not the main arteries running from highways to city centers.

Bikes should not be on roads (i.e. higher speed, like 35mph/56kph), there should be separate infrastructure to accomplish the same tasks. Bike paths should connect streets by bypassing roads, much like highways should connect roads by bypassing streets.

In short:

  • highways - encourage cars, discourage bikes
  • roads - encourage cars, bypass with separate bike paths
  • streets - lots of bikes, discourage cars
[-] [email protected] 11 points 1 day ago

And trademark is way better imo than copyright. Trademark is all about protecting against fraud, copyright is about protecting against access to content.

I'm totally happy with the trademark law we have, but I'd like to see copyright and patent law severely modified and their durations dramatically shortened (like 15 years for copyright, 5-7 for patents).

[-] [email protected] 7 points 1 day ago

IDK, this one is pretty blatant, not sure how anyone could misread it.

[-] [email protected] 9 points 1 day ago

These bike lanes were a way of marginalising cyclists, and freeing up Britain’s expansive road network for the small number of wealthy car owners.

I'm happy to be marginalized if it means I don't have to ride in conflict with cars.

[-] [email protected] 25 points 2 days ago* (last edited 2 days ago)

Uploaded? Completed?

From the article:

Kingdom Come: Deliverance is 80% off until Thursday April 25 so expect to pay $5.99 / £5.29 before then, the Royal Edition is also 80% off and $7.99 / £6.99 if you want to spend a little bit more as well.

127
submitted 1 week ago by [email protected] to c/[email protected]

It has been a while since the last one. So...

Tell us what game you are currently, or recently played, greater than 6+ months old.

If the game happens to be on sale, a link would be a plus.

10
submitted 2 weeks ago by [email protected] to c/[email protected]

The link goes to a related post on another community so I don't have to duplicate it here.

Basically, I'd like to discuss tech options for a Reddit/Lemmy alternative. Here's what I've found:

  • Iroh - early days alternative to IPFS promising improved performance and application control
  • Appleseed - old-ish proposal for a distributed trust system - I'm thinking of using it for moderation (i.e. if you block/report similarly to someone else, that will get automated; you could also explicitly trust someone else [e.g. a CP-detector bot])
  • TrustNet - builds on Appleseed - still reading through the paper to know what it adds over Appleseed, if anything

Goals:

  • distributed storage - worried the fediverse will scale poorly (become too expensive)
  • distributed moderation - power-hungry mods suck
  • local-first - cache/host stuff you care about, reserve some space for preservation

Non-goals:

  • make money - it's a hobby for now, everything would be FOSS
  • image/video hosting - legal issues if you get random CP or something
  • preserve all data - I'd rather sacrifice older/less popular content than lose users - community can run caching servers
  • fediverse compat - P2P makes that difficult, but a bridge should be feasible

Thoughts? What am I missing?

Also, would anyone like me to post updates? It'll mostly be stuff from my research, if I post code, it won't be for a while (I have limited time).

6
submitted 3 weeks ago by [email protected] to c/[email protected]

I'm thinking something along the lines of the GDPR where companies must get consent to track you, and must delete your data upon request.

I see a few arguments here:

  • yes, websites are like stores and have the obligations of a store to protect user data (IP address, HTTP headers, etc)
  • no because the internet is "the commons," so no expectation of privacy (no expectation that the website follows your local laws)
  • no because you're voluntarily providing the data, but you're well within your rights to block tracking attempts

So, some questions to spark discussion:

  • does data collection violate the NAP?
  • does sale of personal data (without a TOS in place) violate the NAP?
  • if no to each of the above, is it worth violating the NAP to enforce a right to digital privacy?
2
submitted 1 month ago* (last edited 1 month ago) by [email protected] to c/[email protected]

I'm going to be overhauling my network over the next few months as I get ready for my new municipal fiber installation. I have a general idea of how to set things up, but I'm not an expert and would appreciate a few extra pairs of eyes in case I'm missing something obvious.

Hardware available:

  • Microtik Routerboard - 5 ports
  • Ubiquiti AP - AC-Lite; plan to add U6+ or U6 Lite once I get faster service
  • some dumb switches

Devices (by logical category; VLANs?):

  • main - computers and phones (Wi-Fi for now, I plan to run cable)
  • media - TVs, gaming consoles, etc
  • DMZ - wired security cameras, Wi-Fi printer (2.4GHz wireless g only)
  • guest - guests, kids computers

Goals:

  • main - outgoing traffic goes through a VPN
  • media - outgoing traffic limited to certain trusted sites; probably no VPN
  • untrusted - cannot access internet, can be accessed from main
  • guest - can only access internet, potentially through a separate VPN from main

Special devices:

  • NAS (Linux box) - can access main, media, and DMZ
  • printer - accessible from main, rest of devices on untrusted don't need to be (I can tunnel through the NAS if needed); can potentially configure a CUPS server on the NAS to route print jobs if needed

Plan:

Router ports:

  1. Internet
  2. WiFi APs
  3. main VLAN
  4. untrusted (VLAN)
  5. unused (or maybe media VLAN)

WiFi SSIDs (currently have a 2.4Ghz and 5Ghz SSIDs):

  1. main VLAN
  2. guest VLAN
  3. untrusted - hidden SSID (mostly for printer) - 2.4GHz only

If the VPN causes issues, I would like the ability to move individual MACs to another VLAN (say, to media, or a separate, usually unused backup VLAN). Not required, just a backup plan in case the VPN causes issues.

This is my first time configuring VLANs, so I'm not really sure what my options are. Also, I'm not super familiar with Mikrotik routers (I'm not a sysadmin or anything, just a hobbyist), I just got fed up with crappy consumer hardware and wanted something a bit more reliable.

Does that sound like a reasonable plan? Is there something I could improve or suggestions you have?

Edit: DMZ is the wrong term, so I replaced it with "untrusted". By that I meant a local-only network, so no Internet access. Ideally I could access these devices from my main network, but they can't initiate connections outside their VLAN. However, that's not necessary, since I can tunnel through my NAS if needed.

8
submitted 1 month ago by [email protected] to c/[email protected]

I installed it over the weekend and so far it's working great! I'm using Wayland with my AMD GPU, and the only hiccup I had was I needed to change my shell to bash (I use fish), which is fine since I have Konsole set to use fish as well.

Have you used KDE Plasma 6 yet? Thoughts?

3
submitted 2 months ago by [email protected] to c/[email protected]

Here's the YouTube video on Reason's channel (event starts about 10 min in), or you can download it at the link for this post.

There's no text transcription AFAIK, so I'll try my best to represent both sides fairly. I do have my own opinions here, so I recommend you watch the video (at least the opening remarks, which is ~35 min long, just after introductions).

Here's the prompt:

Government must play a role in fostering scientific and technological progress by funding basic research.

The definition of "basic research" is a bit squishy, but the definition they seem to be going with is science without a specific goal, such as studying chemistry not to solve a given program, but to see where the research goes. The opposite is "mission science," which is research in a given area to achieve some specific goal important to the government, like weapons. They both agreed that the latter should be funded as needed (e.g. COVID-19 vaccine).

For the affirmative (Dr. Mills):

  • private companies have little interest in basic research
  • government funded basic research has produced immense value (example given: ammonia composition, which wasn't economically useful for 100 years so likely wouldn't have happened as quickly)
  • government funded research is often economically viable, but more importantly, it has non economic value that private research doesn't provide (e.g. man on the moon)

For the negative (Dr. Kealey):

  • publicly funded research "crowds out" private research (i.e. public research doesn't add more scientists, it just moves them from private to public sector)
  • private research is more economically viable
  • private companies need to fund research or they'll lose to their competition

And some prompts for discussion:

  • What is your opinion on the prompt, should the government be funding basic research?
  • Who do you think won? Do you agree with the voting? Why?
  • If you're against the resolution, would you go further and prefer to not fund "mission science" as well? Why or why not?
  • Should your government increase or decrease the amount it's spending on basic science research?

And a final question: do you want to see more of this kind of post?

-2
submitted 3 months ago* (last edited 3 months ago) by [email protected] to c/[email protected]

I'm generally in favor of "hands off" moderation, as in allowing the community to decide which content to promote and which to discourage. I prefer to only step in if someone is violating the rules, either of the instance or of this community.

That said, this community has seen a lot of recent activity, and I'm worried that people who want to discuss libertarian concepts are being overrun. For example, this recent post has more downvotes than the most popular post has upvotes (by a large margin), yet I think this type of post is quite relevant to libertarians.

So I think we're getting a lot of non-libertarian (by pretty much any definition of the word) users in this community, and I'm worried they're not here in good faith.

So, I'd like to know what kind of moderation we'd like to see. I'll be reviewing voting records for posts to try to sus out who I subjectively think are here in bad faith (not planning on any bans though, just getting an idea) since I don't think votes will be particularly relevant for this post. Some questions:

  • should moderators (so far just me) ban serial downvoters?
  • should moderators ban low effort posts, regardless of applicability to libertarianism? (e.g. the recent memes and whatnot)?
  • should moderators pin subjectively higher effort and relevant posts to promote similar content?

So far I've done no moderating because everyone seems to at least be civil, but I don't want this to become a "bash on libertarians" community or I'll just close it.

I created the community to discuss libertarian concepts because the rest of Lemmy seemed very leftist. I basically want something like a mix of /r/libertarian and /r/neutral_news, where citations are encouraged (if not required) and content generally focuses on how to solve problems with less government rather than more. That doesn't seem to be happening, so either we need strict rules or to just close the community down.

5
submitted 4 months ago by [email protected] to c/[email protected]

I like looking at ERN's articles from time to time because they cover so much that I'm all but guaranteed to learn something.

This article is about how, despite the wealth inequality figures, the US is still doing okay when it comes to wealth accumulation. Here are some of my personal highlights from the article:

If I want to put a positive spin on the unpleasant wealth inequality stats in the U.S., I would again point to the net worth chart by age group: Some of our inequality is due to the natural wealth accumulation lifecycle. For example, within my age group (45-49), the wealth Gini coefficient is lower: 0.769. Americans are very good at building assets, thanks to their entrepreneurial spirit and generous tax incentives, like tax-advantaged retirement plans and capital gains deferral.

And later:

It’s also worth pointing out that the Gini coefficient decreased in 2022 and now stands at the lowest level since 2007, though still far above the Gini in the 1990s.

And this is an interesting alternative to some of the rhetoric I'm seeing about the eroding middle class:

If we compare the wealth distribution in 1989 with 2022, most percentiles gained ground. True, the 1%, 5%, and 10% lowest percentile had negative to zero net worth figures. The 1% poorest got deeper into debt. But the middle class is getting richer, albeit modestly slower.

There's a lot here, and my takeaway is that FIRE should continue to be a possibility to the middle class and above. It's not a weird phenomenon that only a lucky few were positioned correctly to achieve, but conditions remain good if you want to put in the work to love below your means and invest consistently.

Anyway, I like looking at graphs and deep analysis like this. Please share your thoughts.

33
submitted 4 months ago* (last edited 4 months ago) by [email protected] to c/[email protected]

Here's an archived version of the page.

What follows is largely a reaction to analysts predicting a recession and giving advice on how to adjust your investing strategy. The TL;DR here is: don't, they get it wrong more than they get it right.

Among PF enthusiasts, there's a saying that goes something like this: analysts have predicted 20 of the last three recessions.

Here's a chart for the S and P 500 long term after inflation. As you'll notice, long downward trends are quite rare, and the general trend is upward. In general, you can expect 6.5-7% long term after taking out inflation (~10% before inflation) if you buy and hold a broad stock market index fund. It seems almost every year someone calls for a recession, and this year is no exception. People were calling for recessions staring in 2015 or so, and look how that turned out.

Finance pundits and blogs like saying outlandish things like "recession will happen this year, liquidate stocks and buy X, Y, and Z," and if you're lucky, they'll throw some fancy charts up to make you think they know what they're talking about. But just know that all of this is for attention, they make money through ads or airtime, and some will try to sell you a book or something. The worst ones do a pump and dump scheme where they'll invest in security X, hype it up, and then sell when there's a bump in prices and average investors are left holding the bag.

Everyone seems to think they have some system for beating the market, but few professional fund managers manage to beat the index they benchmark their fund with, and even fewer can do it consistently:

Across all domestic actively managed equity funds, 88.4% underperformed their respective benchmark over the last 15 years, according to an analysis of the S&P SPIVA report.

...

More than 80% of large-cap funds underperformed the S&P 500 over the last five years. In 2019, 79.98% of large-cap funds underperformed compared to the S&P 500, which was just a hair better than the five-year average.

So if you buy a large cap index fund, you'll do better than 80% of professional fund managers over 5 years, and you'll outperform nearly 90% of them over 15 years. So don't listen to their nonsense about changing allocation during a recession (or even whether there will be a recession) because you're statistically better off ignoring it.

To really drive it home, let's look at the linked article about Betty, the world's most unlucky investor, who invested only at the worst possible times (just before every major recession) since the 1980s:

Even though she picked the worst six moments since the 1980s in which to invest, she made an average profit over the next five years of 20% and an average profit over 10 years of 100%. She doubled her money. Despite her disastrous, terrible timing, she was in the black after five years on four occasions out of six, and in the black after 10 years 10 times out of 10.

Today, even though her total cash costs from those six investments totaled just $3,500, her portfolio is worth $17,500. That’s more than five times her investment. And that’s even factoring in losses this year, which have seen the global stock market — and Betty’s portfolio — fall 22%.

Just think of how much better she could've done if she had invested consistently, which means she would've bought at the lows and middles instead of just the highs.

If you instead listen to the pundits, you're likely to buy high (you'll miss the bottom, I guarantee it) and sell low (you'll sell early or late). Do what has worked well historically and buy and hold a diversified portfolio.

I don't know if a recession is coming, but I do know it'll change nothing about my investing strategy, other than perhaps how much I can invest. If you're nervous about the economy, make sure your emergency fund is funded and stay the course with your investing strategy, whatever your desired asset allocation is.

25
submitted 4 months ago by [email protected] to c/[email protected]

I was doing a little EOY accounting, and I wanted to see where I could afford to retire to with my current amount of investments. I searched a bit, but couldn't find anything good, and then I remembered the old /r/financialindependence sidebar.

Since I happen to be a mod, I went ahead and abused my mod powers and added it to the community info here. My wife is from another country, and we're not yet to the point where we could retire there, but we're surprisingly close, so I now have a new milestone to shoot for.

I don't know the methodology they use here, or how often it's updated, but I think it's fun to look around at options.

I remember another site that simply gave a list of countries in order from cheapest to most expensive and you'd enter your current assets and figure out where you could go. I thought it was a lot of fun to see what "upgrades" an extra year or two of working would get me, but I didn't bookmark it. If anyone can find something like that, please post it.

Anyone considering going expat? If so, does this resource seem accurate? Do you have others you like better?

9
[US] End of year PF tasks (www.kiplinger.com)
submitted 4 months ago by [email protected] to c/[email protected]

I like to review my financial situation near the end of the year to prep for tax season, give to charity, etc. For any who cannot access the article or are too lazy, here are the things they recommend:

  1. Tax loss harvesting
  2. Contribute to retirement accounts
  3. Convert IRA to Roth
  4. Reassess risk tolerance
  5. Review RMDs - only for 73+
  6. Charitable contributions
  7. Fund accounts for dependents

I check most of these, but more importantly I look at the new limits for 401k and IRA, as well at HSA limits for the upcoming year.

Is there something you like to do financially at the end of the year?

33
submitted 5 months ago by [email protected] to c/[email protected]

In this post, I'll provide a lot of basic information about investing, with links to additional reading for various concepts. Most of these concepts are not US-centric, though I will be mentioning US-specific details, such as tax-advantaged account types.

What's the difference between a mutual fund, etf, and index fund?

A mutual fund is a financial vehicle where assets from a large number of investors are pooled to be invested as one entity. Mutual funds have strategies, and investors invest based on how well the fund executes that strategy. For example, you may compare two large cap funds, and they have similar returns but one has a much lower expense ratio (the fees for running the fund), so you may choose the cheaper fund. Mutual funds generally can only be purchased after market hours, and only through a brokerage that has an agreement with the fund. If you buy a fund through a brokerage that doesn't sponsor the fund (e.g. if you buy a Vanguard fund from E-trade), you'll pay a fee for each transaction, whereas you'll pay nothing if you buy it from the brokerage the mutual fund is associated with (e.g. a Vanguard fund from Vanguard). With a mutual fund, you generally invest a certain amount of money, and the amount of shares really isn't that important.

An ETF is very similar to a mutual fund, except it is traded like a stock. So if you want to buy a share of an ETF, you'll just pay whatever commission your brokerage charges (often $0), just like you would with any other stock. However, since it trades like a stock, you can generally only trade in whole shares, unless your brokerage allows fractional share trades. So an ETF is essentially a mutual fund that is traded like a stock.

An index fund is a specific kind of mutual fund/etf, where the strategy is based on an index. This means the fund manager has a lot less input on how the strategy is executed, since they're trying to match a specific asset allocation instead of buying winners. For example, one popular index is the S&P 500, which is defined as the top 500 companies in terms of market cap (what the market thinks they're worth), and index funds tracking the S&P 500 will by based on the percentage of market cap a given stock has. For example, let's say Microsoft is 10% of the S&P and Apple is 15%, the fund would buy 10% Microsoft shares and 15% Apple shares, and the rest would go to the rest of the companies in the index in the same fashion. Since there's less analysis of individual companies, index funds can operate on very low expenses.

When comparing funds, focus more on the expenses and strategy instead of past performance, because past performance does not guarantee or even indicate expected future results.

So in short:

  • mutual fund - you invest money, and the manager buys stocks/bonds according to a defined strategy
  • etf - you buy shares, and the manager buys stocks/bonds according to a defined strategy
  • index fund - restricts the manager to a very specific strategy, where purchased stocks/bonds must match a defined index

The vast majority of active fund managers fall behind the S&P 500. So in general, you'll probably be better off with an index fund instead of an actively managed mutual fund.

What is a stock?

A stock represents marketable pieces (shares) of ownership in a company. When a company is incorporated, the owner splits the company into some number of shares, and those shares can be sold individually to raise money to grow the company. The owner of the company is one with more than half of the shares (otherwise called a controlling stake), and if nobody owns a majority of the shares, it becomes a democratic system where each share represents a vote. In practice, only very large shareholders end up voting for board members, and the board hires a CEO that ends up making the rest of the day-to-day decisions.

This is true for both public and private companies, though purchasing shares in a private company cannot typically be done on the market and needs to be done through existing shareholders. When a company "goes public," private shares are converted to public shares and can then be sold on the open market.

If your company offers an employee stock purchase plan, make sure you know how you can liquidate those since shares in a private company can be very difficult to sell.

What is a bond?

At a high level, a bond represents a unit of debt for some organization. Basically, you're lending that org money, in exchange for them paying you back at some rate over some period. Some bonds pay dividends (i.e. you'll get the interest at regular intervals), and others instead are paid off at the end of the bond period in a lump sum.

Bond Ratings

Bond ratings represent the rating issuer's confidence that the organization will repay its debts as agreed. These ratings vary a little by rating org, so I'll be using S&P's rating system here.

Each rating consists of a letter in the range A-D with a + or - sign or number (e.g. A+, A-1, etc), and it works similar to letter grades in schools. The higher the grade, the lower the risk. In general:

  • A-1/AAA+ - investment grade; top possible score
  • A-2/AA - investment grade, strong score
  • A-3/A - investment grade, adequate risk
  • B - speculative, currently meeting commitments
  • C - speculative, vulnerable to default/non-payment
  • D - speculative, in default

Money market funds will stick to investment grade bonds, and "junk" bonds are the bottom two groups (C and D).

The main rating groups are S&P, Fitch, and Moody, and they can use different rating systems, especially for different types of bonds (e.g. a short-term vs long-term bonds can use different systems from the same org, as shown above with A-1 vs AAA).

In general, the higher the rating, the lower the return, but also the higher the probability that you'll actually get the return promised.

Tax implications

There are several types of bonds, like corporate, government, and municipal, and each have different tax implications. What follows is very high-level, there's a lot of nuance in the bond market wrt taxes:

There is a lot of nuance, so look into your local and state tax laws to ensure you understand.

Asset allocation

Your asset allocation refers to how your investments are distributed across different asset classes. The most popular asset classes are stocks and bonds, though there are other asset classes investors may be interested in, such as:

  • real estate
  • precious metals
  • futures - e.g. purchase contracts for commodities (e.g. you could trade barrels of oil)

Asset classes can be broken down further, such as for stocks:

  • market sector - tech vs utilities vs manufacturing, etc
  • growth vs value - value means companies that are likely undervalued, growth means companies that have shown strong returns vs competitors; there's also dividend strategies (i.e. companies that tend to return profits to shareholders instead of investing in the core business)
  • market cap - large cap (massive companies like Microsoft and Apple), mid cap, and small cap (smaller companies, like Jack in the Box, Polaris, etc)

Choosing an asset allocation can be an overwhelming process, and there are a lot of strategies that people claim works. The more important thing is to understand your strategy and stick with it instead of shifting with the trends (if you always buy what recently performed well, you'll be essentially buying high and selling low).

Here are some popular asset allocations (I've listed what I think is interesting below):

  • Bogleheads strategy - buy stocks according to market cap, bonds according to age; three fund portfolio, two fund portfolios; the global market cap is ~55-60% US stocks, 40-45% international stocks; bond percent should be 100 - your age (quite conservative)
  • 60/40 - 60% stocks, 40% bonds - generally recommended for retirees and those close to retirement, though some do it throughout their investment career
  • "Permanent portfolio" - 25% gold, 25% cash (or Treasuries), 25% stocks, 25% bonds - intended for asset preservation and ends up being quite conservative
  • dividend portfolio - buy almost entirely stocks with high dividends (one strategy is Dogs of the Dow, and then plan to live off dividends in retirement

There are a ton of exotic ones as well, such as Hedgefundies Excellent Adventure (lots of leverage in a portfolio intended to match risk of non-leveraged portfolios). Don't do anything like that without fully understanding how all of the pieces work, and even then, I recommend one of the above over anything that uses leverage.

Account types

Most countries offer tax-advantages to encourage residents to at least partially fund their own retirement. This will cover US-specific tax-advantaged account types, though similar structures exist in many other countries, and searching for " " will probably yield articles with information for resources for your region.

Here are the main account types, you may have access to some but not all:

  • 401k - employer-sponsored retirement plan
  • IRA - individual retirement account - available to everyone
  • HSA - health savings account, must have a high-deductible health plan; essentially becomes an IRA once you hit 65
  • 457 - employer sponsored plan offered at many state and local government agencies, and some non-profits
  • 403(b) - similar to 401k, but offered to teachers, private non-profit employees, and some others

There are others, but these are the ones you're likely to run into that are relevant for retirees.

There are two main types of tax advantages these offer, referred to as traditional and Roth, though there are nuances for each account type. In general:

  • traditional - get a tax deduction on contributions, no taxes on growth while it's in the account, pay taxes when you withdraw
  • Roth - no deduction on contributions, no taxes on growth, no taxes when you withdraw

If your tax bracket is the same when you contribute and when you withdraw, Roth and traditional accounts are equivalent. As a quick demonstration, let's say you have a 10% tax rate, you invest $10k, your investments double, and you withdraw everything all at once:

  • Roth (post-tax) - invest $9k ($10k - $1k taxes), grows to $18k, withdraw $18k
  • traditional (pre-tax) - invest $10k, grows to $20k, withdraw $18k ($20k - $2k taxes)

There are limits to how much you can invest in tax-advantaged accounts, and traditional accounts sometimes have income limits to receive a deduction. There are strategies to maximize your tax-advantaged, so if you think you don't qualify, please ask since you may have options (e.g. a backdoor Roth IRA if you're over the income limit for Roth IRA contributions).

Long term capital gains vs income tax brackets

Regular brokerage accounts have no tax advantages, but they do have the advantage that gains are taxed as capital gains instead of income, whereas a traditional IRA/401k/etc is taxed upon withdrawal as income. Long-term capital gains brackets are lower across the board for the same income level vs income tax, and there's a 0% long-term capital gains bracket that corresponds to most of the 12% income tax bracket, then 15% up to the middle of the 32%/35% brackets, and then 20% thereafter. Short-term capital gains are taxed as income, so be careful to only sell assets that qualify as long-term capital gains.

There are situations where a regular brokerage account can be advantageous over taking a tax deduction for a traditional account. Here's an article about why you may want to use a traditional account and invest the tax savings in a brokerage vs a Roth account (target audience is early retirees, but it's applicable to traditional retirees as well). It's a fairly niche case, but applicable to surprisingly many people.

Tax-efficient fund placement

Let's assume you have a mix of assets in the following:

  • Roth account
  • traditional account
  • taxable brokerage account

In general, you'll want to do the following:

  • Roth account - highest growth since it's 100% tax free
  • traditional account - capital gains generating investments with relatively low growth, e.g. bonds and dividend heavy stocks
  • taxable brokerage account - international stocks because of the Foreign Tax Credit (e.g. you get a part of the taxes you paid back), assets with low capital gains distributions, and low need for rebalancing

However, the benefits here are far less than the benefits for using the right account types for you. For example, the Foreign Tax Credit is something like 0.23%/year of your taxable investments if you're invested in something like VTIAX, and you'll be paying taxes on something like 2.8% of that same investment. So use your tax advantaged space first, and then optimize from there.

Conclusion

Investing can feel overwhelming, and there's so much conflicting information available out there. My personal advice is to keep it simple using tried-and-true methods that have consistently had good results in the past. Here's what I do:

  • max my tax advantaged accounts
  • 70% US stocks, 30% international stocks asset allocation - I think the US will continue to outperform, but I want to hedge my bets some
  • buy low-cost index funds, one fund per account to keep it simple; in my case, this gets me close:
    • 401k - 100% US stocks
    • IRA - 100% US stocks
    • HSA - 100% international stocks
    • taxable brokerage - 100% international stocks
  • I don't have any bonds because I'm not retiring anytime soon and I have a high risk tolerance (I didn't panic sell in 2008); I do count my emergency fund as my "bond" portion though, so there's that
  • check on my investments about 1-2x/year to make sure everything is close to my target (if I'm over in US stocks, I'll swap some IRA space to international; if I'm over in international stocks, I'll swap some HSA space to US)

My IRA and taxable brokerage is at Vanguard, and my HSA is at Fidelity. When I switch jobs, I roll my 401k -> my IRA.

This got pretty long and I probably should've broken it up into multiple posts, so please let me know if there's an area you'd like more detail on and I'll consider making a post about it.

view more: next ›

sugar_in_your_tea

joined 10 months ago
MODERATOR OF