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M1 Finance 2019 ReCharacterize IRA to Roth IRA - Did You Make A MISTAKE?! - YouTube
Channel: BrentInvesting
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hello financial investors and welcome to
the channel my name is Brent and today
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we are going to be doing an m1 finance
video of what happens on m1 finance or
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maybe on any other broker if you
accidentally deposit funds towards an
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incorrect account in calendar year 2019
or 2020 so in this example I had seen
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that earlier in 2019 I had actually made
an IRA deposited capital towards it and
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when I was going back through my tax
statements and looking at just the
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accounts I had made the IRA instead of
the Roth IRA incorrectly and then had
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deposited capital into it then corrected
it later on so here we are today I
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reached out to everyone finance to see
if I could convert that capital that I
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had initially invested towards the IRA
into a Roth IRA a Roth IRA so I'm going
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to go ahead and cover the accounts we're
gonna go ahead and cover the email that
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I emailed to them and then go over the
response and what we're doing from this
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point forward so if that at all sounds
interesting to you then definitely tune
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in to today's video remember to also
subscribe below by seeing the red button
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if you do enjoy this video find a
helpful entertaining and definitely give
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this video a thumbs up and if you have
any comments or questions that you know
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might arise from this video or just want
to ask a question in general about the
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stock market or dividends definitely
leave it into the comments below I do
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read and apply to all your comments and
let's go ahead and get into it so quick
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overview over on m1 finance on my
account not my wife's account I have
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three counts I had started up what I
thought was a Roth IRA back when I was
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doing my kids account and I wanted to
start a Roth IRA begin investing in it
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that way he could learn the process of
investing capital and having that
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capital work for you well prior to that
had actually made an IRA instead of a
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Roth IRA so not really seeing them I had
deposited capital towards it and then
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right now when I was doing my taxes here
in 2024 2019 I wanted to make that
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change
that the capital that was invested
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towards the IRA was actually invested
towards the Roth IRA so we'll go ahead
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and cover what needs to happen here
overall this is the growth hacks will
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count this account started with a
hundred dollars of equity and I did a
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little bit of research asked to ten
companies that I wanted to buy and hold
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within this account for the longer term
now of those ten I did add a few towards
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the bottom here Facebook and Netflix I
haven't deposited any capital towards
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them these positions here have been long
positions since 25 july 2019 they've
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just been kind of experimental these are
companies that I use pretty often Splunk
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I use actual logarithm a work versus
plunk but I have used plunk in the past
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and would like to begin using Splunk in
the future for log monitoring Amazon I
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order products and have some of their
services such as Prime Google were on
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Google all the time here they're
searching Gmail YouTube Adobe we use
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Adobe just about you know opening PDF
they do have a lot of other products as
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well this is a medical center this one
I'm actually not too familiar with but
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when doing the research on this I
believe they had a lot of upside
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potential mg I have a risin 7 1700 in my
computer I've been using risin products
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now for the past two or three years and
saw them as a really good competitor to
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Intel with their chips and that way
Salesforce we use CRM at my past job
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Berkshire Hathaway this one is actually
a lot of employees from my past job
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actually went to go work at Berkshire
and Berkshire is always just a great
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long-term growth company to kind of hold
beat and this was another very common
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symbol to the IOR MD just a company that
I felt had a lot more upside potential
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and deposited decided to invest in this
PayPal I use PayPal I get some of my
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affiliate income through PayPal from
different affiliate providers they pay
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out through PayPal Facebook I'm on
Facebook I have multiple groups i have
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multiple Facebook pages I have my own
personal page how I sort of socialize
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now online with my friends
and family through Facebook and Netflix
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we don't have an account to ourselves
but we have a family account that is
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shared so we're we do use Netflix every
once in a while my wife enjoys watching
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Netflix as she does stuff around the
house it's kind of has it in the
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background but all these positions
besides these two are positions or
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products and services that we use so
this little portfolio here has actually
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done really well you can see here during
the one month period it's that about
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eight point nine percent but when we
compare this to the S&P 500 one month
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performance this is still down sixteen
point three six percent and it's still
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down roughly 20 percent off its high so
it's doing really well in comparison to
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the S&P 500 and I really like tech my
whole background right now is all tack I
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grew up using technology and enjoying
technology so there's really not a whole
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lot of activity here just besides those
initial pints and then being able to
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reinvest that one cent there prior to m1
finance recent change now the IRA this
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one right here was one that I created
with my my kiddo Jaden and the way I
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wanted to kind of set up this account
was I wanted to show him how he can make
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his money work for him we have a whole
video on this channel if you guys are
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interested in I'll have it linked down
in the comment section will just be a
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comment down there and we kind of went
in explaining the process of how $100
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$200 $500 can be invested into companies
and then those companies pay you
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portions of their their earnings and he
thought it was very interesting we play
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Monopoly he understands how buying and
assets is able to produce you income and
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this is count
I had actually started it has an IRA
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instead of a Roth IRA which is where I
want to make this conversion and here
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this one has been around for quite a
while it's down for the month 13 point
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16 percent for the quarter down around
20 1.8% so if we look here look at the
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three month I think the this one
actually been beat just a little bit
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harder harder the ETF within this
account
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as SPL v prior to just having SPL V I
did sell it on the 12th I sold out of SP
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HD and moved 100% into SP LV and this
portfolio has generated a few dividends
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here you can see dividends getting paid
out within this dis account if we just
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look at the dividends themselves we've
made roughly let's see here a dollar
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fifty two three four five six seven
eight nine dollars or so in dividends
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actually shows it right there so yeah
eight dollars an 86 cents of just
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dividends I haven't been able to
reinvest it because I haven't hit that
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threshold of ten dollars needed to
reinvest currently as of the 15th of
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April it will be moving up to a $25
deposit and cash in order to auto
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reinvest so I don't make $25 on a
monthly basis on this account so unless
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I add more capital to this portfolio
this account here this IRA it will be a
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very long time until I'm able to
reinvest that capital unless I actively
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deposit capital into an IRA which I'm
not focused on doing and then we have
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the Roth IRA now this one's just started
this year I started it in 2020 and the
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market was falling down in March second
I started up the account and I begin to
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invest capital now I've only funded it
for 2019 and a little bit for 2020 now
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the reason here this is funded for 5440
is because if we bring up our
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handy-dandy calculator and we go five
four four zero and we switch over to the
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IRA will see that the IRA has five
hundred and sixty dollars contributed
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towards it five four four zero and we
add the five sixty that gives us a grand
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total of $6,000 and that is your maximum
contribution that you can make between
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all your IRAs and Roth IRAs across all
your accounts it doesn't matter where
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your account at is if I have an account
on m1 finance that have an account on
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Merrill edge if I were going to count
over on wiebel link below you get two
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free stocks then you can only have a max
contract of six thousand dollars for
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that calendar year so that is why that
is my maximum that I could deposit split
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between these two accounts about what I
want to do is move this capital this
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deposit of 500 to $60 towards the Roth
IRA and that should go towards 2019
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putting this up to 6,000 and then I'll
have the thousand that I initially put
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into this account leaving me with a
remainder of $5,000 left you deposit
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into this account you know if I choose
to actually have capital that I've
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invested into Merrill edge I think I put
$2,000 into my marrow educate and that's
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being used to just kind of buy and do
different activities with at this time
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so this is where we're going to be
moving the capital from the IRA into the
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Roth IRA now let's go ahead and bring up
the email here so I emailed the em1
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finance support team hello
I noticed that in 2019 I open an IRA
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early on instead of a Roth IRA I
corrected the issue by opening a Roth
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IRA afterwards and contributing towards
it I had meant to contribute to the
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initial five hundred and sixty dollars
towards e 2019 Roth IRA is it possible
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to just mark those as a Roth IRA you
know contribution for 2019 so I'd still
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keep my same deposit my same ETF
purchase my same shares and just mark it
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as a Roth IRA I have it filed 2019 taxes
yet and was checking over my tax forms
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and I didn't notice that I have any tax
forms for the IRA or Roth IRA so prior
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to filling the you know I didn't defer
any capital from the IRA so if you
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invest capital into an IRA for a
calendar year you're able to defer that
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capital I didn't do that so I just want
to mark my total deposit towards Roth
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IRA that I've already paid taxes on it
so here I'm just saying so prior to
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filing I was going to just say that I
deposited 6000 towards an IRR towards a
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Roth IRA calling it good
that I've already paid taxes on it I
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don't need to defer any capital and then
if you have any questions you can email
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me or call me at xxx you know and well
I'm available after 8:30 a.m. Pacific
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time so and then their response was very
good so I just kind of scroll up here
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and Elmore financed response said hi
Brent thank you for reaching out to the
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n1 finance we can characterize your
traditional IRA contribution to the Roth
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IRA in your M one account in order to
proceed please ensure your contributions
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amount along with any gains you may have
received is in cash you can click here
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to learn about submitting a a sell order
once you are holding once your holdings
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are in cash please reply to this message
with the amount you are wanting to move
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so we can request the rate
recharacterized again recharacterization
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again please let us know if we can be if
we can help with anything else so
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they're basically saying that in order
to have the capital recharacterize for
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2019 all I need to do is go into the IRA
and sell this and have it all in cash so
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this capital here that I've made it
doesn't matter too much because this is
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all 2019 stuff there really hasn't been
any sort of gains from the capital
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you obviously see that I'm negative in
this aportfolio by roughly thirty one
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point eight nine percent I'm not sure
why it shows that but that's what that's
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what it's showing us right now for the
overall now I have to sell this capital
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off make it all in cash and then let
them know how much of my contribution I
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would like to have converted which will
just be the five hundred and sixty
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dollars which is not five hundred and
sixty dollars now it's actually you know
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four hundred and fifty six dollars of
equity ambassador and the eight hundred
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and eight dollars and ninety-six cents
and in the cash so here what I'm going
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to do is go over here and turn off
do not Auto invest my cash save that and
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then what we're going to do is go ahead
go back to the portfolio edit and I'm
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not 100% sure if I'm able to do this no
I need at least one slice it says so
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here and what we can do instead is sell
sell and sell it all to have nothing
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available so confirm sell so I can put
it to $500 available for order sell
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order $500 so that should see what
happens here so there we go I submitted
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a sell order for the investigate and
p500 lowball city has been submitted so
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tomorrow on Wednesday the 1st of April I
should completely sell out of all the
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position leaving me just with cash and I
do have auto invest turned off now what
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I can't do it shouldn't do is I should
not go in here
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I should not select a random fund in
here to add to my basket and then select
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this and make this a hundred percent and
then remove this because if I do this
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whoops where to go let's go ahead and
I'll show you one second bond if I do
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this this way and I make it a hundred
percent I save this what it's going to
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do is it's going to say that any remove
slices are going to be soldier in the
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next trade window so anything that was
removed such as my SP LV that'll get
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sold off during the next trade window
but what will happen with those proceeds
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those proceeds the equity that's within
the count will be reinvested back into
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this pie so if I were to remove SP LV
right now from the pie and put in
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another one just so it could be 100% out
of it
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all the equity we sold out of it and
that it would just be purchased back
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into B and D so I don't want to do that
I'm gonna go ahead and reset this leave
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that's out 100% and exit out here I'm
gonna leave it just like this
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I want to 100% beat all the cash that I
possibly can be moved out of SPL V and
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then I will move the capital from this
account over into the Roth IRA and have
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it in that account now I don't think
that this is a bad time to self you can
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see here that as of recently this last
few weeks we're actually pretty positive
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and right now if I were to bring up you
know I'm not obviously trying to time
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this because it's a long-term game here
but when looking at where the market may
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move here in the short-term if I do sell
tomorrow I may sell at open and the
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market may possibly be down two or three
percents in the morning and as we move
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through the rest of this week we had a
really positive week last week putting
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on double digits so I do believe we may
give a bit of that back this week you
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know already here on Monday we're down
almost you know one percent and the
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Nasdaq and about 1.6 1.8 in the S&P Dow
Jones but looks like Wednesday's looking
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like it's going to be a bit of a story
day and we still don't know what
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Thursday and Friday have in in store for
us so by selling right now I think this
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is a good opportunity to sell out of
these positions have it in cash move
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that capital back over into the Roth IRA
and then I'll just use the capital to
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rebuy back my shares that hopefully you
know a similar unit cost or even lower
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unit cost than when I initially sold
these two more more tomorrow morning
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when I am selling them so that is what's
going to happen you can see here we have
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the details tomorrow I am going to be
selling roughly 500 dollars and tomorrow
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the markets going to be down so it
should sell everything out of this all
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the equity and that'll all be left in
capital here tomorrow so I'm going to go
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ahead and email back my finance right
now letting them know that my sell order
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is n to sell
out of all of my shares on this account
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and the account should be ready tomorrow
afternoon for their transfer of the
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funds so that is going to be it for
today's video I thought it'd be kind of
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an interesting video to do I don't know
if anybody else has had this issue where
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they maybe open an account incorrectly
for 2019 2018 2020 put it into the wrong
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account and maybe looking to get that
fix themselves so I thought this would
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be a good video to kind of showcase what
steps I am taking to kind of fix some of
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the errors in my way in my account and
correct it so that is it for today's
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video if you guys did enjoy this video
find it helpful
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definitely smash that thumbs up button
below if you have any comments or
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questions about any of the activity the
stock market dividends or just want to
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share your insights on what you think
the market is going to be doing and this
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week or in this month and April now go
ahead and drop that in the comment
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section below and of course if you have
not yet subscribed to the channel I
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would really appreciate if you go down
there and subscribe hit the battle to be
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notified every time we post a new video
here on the channel and that is it thank
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you all for tuning in I will so next
time have a great day bye
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