How you guys balance between contributing to tax advantage accounts and your brokerage account. I'm in a fortunate position to max my tax advantage contributions but won't have enough for a regular brokerage.

Would love to buy a home someday just not sure when so I was thinking about putting some cash in a normal brokerage account.

Btw anyone here come from Reddit? Would love to see this instance grow.

[–] runawaycorvid@lemmy.world 2 points 2 years ago* (last edited 2 years ago) (1 children)

I don’t have a great answer for you, but one thing I learned from buying my first house is that you don’t have to put down as big of a down payment as you might think. My wife and I did 3.5%. We were fortunate that we made a good amount and had good credit, but we had very little in savings. We were both putting a ton toward student loans.

Although a small down payment is tough to swallow these days considering that means you’re financing more house at 7% plus.

[–] SqueakyDoors@lemmy.world 1 points 2 years ago (1 children)

Did you have to pay PMI?

[–] runawaycorvid@lemmy.world 1 points 2 years ago* (last edited 2 years ago)

Yes, but again because of our credit score and good DTI ratio, the PMI was very reasonable. Like $40/mo IIRC.

We refinanced and got rid of PMI when the housing boom happened and our equity was suddenly over 20%. That was pure luck, but anyway it’s possible that rates will go back down during the next recession.

[–] yenahmik@lemmy.world 2 points 2 years ago

Since your timeline for buying a house is "someday" I would keep maxing tax advantaged accounts. Once you have a more firm timeline (within a couple of years), I'd start funnelling my money to a down payment fund.

[–] thecitywelivein@lemm.ee 1 points 2 years ago

I'm in a similar phase right now. We plan on moving in 3-4 years and I'm leaning towards turning our current home into a rental. We bought it at $300k and it's now worth $650k. We are now putting money into a regular brokerage to save for the next down payment. I don't think we'll have enough saved in time so we're leaning towards lowering our tax advantage contributions until then.

[–] FancyPantsFIRE@lemm.ee 1 points 2 years ago (1 children)

I haven’t consciously done much to balance it. When I was fresh out of college I couldn’t afford more than tax advantaged space and so I just did that. 15 years on I’m fortunate enough that income has made it a non-issue.

I came over from Reddit during the API dust up and never really went back, but it’s very quiet here.

[–] SqueakyDoors@lemmy.world 1 points 2 years ago (1 children)

Definitely much more quiet here. Would love to see this instance grow.

[–] yenahmik@lemmy.world 2 points 2 years ago* (last edited 2 years ago)

To be fair, there's over 2million subscribers on Reddit and maybe 250 here (edit: I see we're up to 350 now!). It will just take time to build up enough people to get more activity here.

[–] CherenkovBlue@iusearchlinux.fyi 2 points 2 years ago (1 children)

I'm ignoring it in terms of decision making, but any explanations for why the markets are down right now (USA)?

[–] runawaycorvid@lemmy.world 4 points 2 years ago

My amateur attempt at explaining:

High interest rates —> financial indicators continue to be strong (inflation) —> Fed may raise interest rates much higher than previously expected —> panic sell from riskier companies that may struggle with higher borrowing costs and move to cash/treasuries.

Ride it out and pick up some cheap stocks.