|
Seems entirely too risky if you're planning that money to be liquid. What if the stock market tanks again when you NEED your cash? Half of your money could be wiped out. You'll just have to suck it up and keep it in a money market or savings account. If you don't need the money for 5-10 years then that might be an idea but I'm not qualified to give an opinion on that.
|
#
?
Mar 3, 2011 17:25
|
|
|
|
| # ? Jun 9, 2024 15:03 |
|
|
Don't chase a couple points of interest where it involves risk unless you're talking about more than $10,000 and at least a five year horizon. The costs clearly outweigh the benefits.
|
|
#
?
Mar 3, 2011 23:03
|
|
|
a
haximus prime fucked around with this message at 03:36 on Oct 28, 2022 |
|
#
?
Mar 4, 2011 04:12
|
|
|
haximus prime posted:Hey guys. I'm 18 and just came into a bit of money. I'd like to start a Roth. I'm just concerned that it's too "early"?
|
|
#
?
Mar 4, 2011 04:31
|
|
|
moana posted:It's never too early. However, I believe you can only put the money into a roth if it's money you earned as income. this is correct. haximus prime posted:... should I wait until after college to start something like that ... unless you have a full ride, I would think the money could go to paying for college?
|
|
#
?
Mar 4, 2011 09:10
|
|
|
Hey guys, I need some recommendations on how to diversify my holdings in my 401k. I'm 26 and I get a company match on the first 6% of my 401k contributions (which is managed by Fidelity), my current 401k balance is about 30k, invested about 85% in stocks and 15% in bonds. I'd like to roughly keep this same balance going forward. Here are my potential funds, the ones I currently hold have an asterisk before them (note that the numbers after the fund inception date are the 1-year, 3-year, 5-year, 10-year, and lifetime average annual returns, followed by the as-of date):401k options posted:Stock Investments
|
|
#
?
Mar 4, 2011 15:59
|
|
|
You haven't posted the expense ratios. But looking up a couple - I would probably use the two Spartan index funds and the Vanguard bond index, because they are quite cheap and very diversified.
|
|
#
?
Mar 4, 2011 16:07
|
|
|
Good point about the expense ratios. Those aren't neatly compiled anywhere so I can't post them right now, but I can say that the funds you recommended are much cheaper than the ones I'm currently holding, so that's a big plus. Any thoughts on the split between the two stock funds?
|
|
#
?
Mar 4, 2011 16:13
|
|
|
I'm fairly aggressive, but assuming you have the risk tolerance would go: 15% Bond Index 50% SP500 Index 35% Intl Index
|
|
#
?
Mar 4, 2011 16:23
|
|
|
I'm pretty aggressive too, so that makes a lot of sense to me.
|
|
#
?
Mar 4, 2011 16:31
|
|
|
That is pretty much exactly my allocation right now, for what that's worth... I'm 30-odd so I'll be ramping up the bonds in the next year or three though.
|
|
#
?
Mar 4, 2011 17:22
|
|
|
Toaster Ding posted:This isn't a retirement question per se but I hope it still fits with the thread - You might try a high-interest checking account. Saw it recommended on the bogleheads forum. These have strange seeming (to me) requirements to get the good rate: things like minimum number of debit card use, must have at least one automatic bill-pay. All-in-all they seem pretty easy to meet. The couple accounts I looked at didn't charge a fee if the requirements were not met, it just reverts to a crappy interest rate for the month. http://www.depositaccounts.com/checking/reward-checking-accounts.html
|
|
#
?
Mar 4, 2011 17:37
|
|
|
alreadybeen posted:I'm fairly aggressive, but assuming you have the risk tolerance would go: When you say this, what exactly are you referring to? How do you invest in an Index? Through an ETF or something?
|
|
#
?
Mar 4, 2011 19:21
|
|
|
He was helping out with my question about diversifying my 401k. One of the fund options I can choose is one that tracks more or less with the S&P 500, and another is one that is an index of international stocks.
|
|
#
?
Mar 4, 2011 19:24
|
|
|
Zero The Hero posted:When you say this, what exactly are you referring to? How do you invest in an Index? Through an ETF or something? Exactly as revengeanceful said, buy mutual funds or ETFs that are indexes. Regardless of your allocation, they are an extremely efficient way to diversify.
|
|
#
?
Mar 4, 2011 19:28
|
|
|
alreadybeen posted:Exactly as revengeanceful said, buy mutual funds or ETFs that are indexes. Regardless of your allocation, they are an extremely efficient way to diversify. So if an ETF tracks a given index, is there anything else to know? For example, IVV ISHARES S&P 500 INDEX FUND tracks the S&P 500, I'm assuming, but is there another ETF that does the same thing? If so, what would be the difference? Are there any brokerage fees or anything like there are for mutual funds? EDIT: Actually, I think I stumbled across the answer to my own question. http://www.investopedia.com/ask/answers/06/isharesvipersspiders.asp Now I just have to figure out how do find what the expense ratios are.... Zero The Hero fucked around with this message at 02:29 on Mar 5, 2011 |
|
#
?
Mar 4, 2011 19:51
|
|
|
31 years old, steady job (been with the same company for ten years), gross salary is about $50k/yr. Here's my current portfolio: +++ 401(k): Contributing ~$4000/yr (including employer matching), current balance ~$25,000: JLIOX (Retirement Living at 2040) - 25% JILGX (Lifestyle Fund - Growth Portfolio) - 15% ODVYX (Oppenheimer Developing Markets Fund) - 20% OIGYX (Oppenheimer International Growth Fund) - 40% Roth IRA: Contributing $5000/yr, current balance ~$18,000: VFORX (Vanguard Target Retirement 2040 Fund) - 100% Non-retirement (taxable): Current balance ~$12,000, no fixed contributions. VWELX (Vanguard Wellington Fund Investor Shares) - 100% +++ I max out the Roth IRA every year (started in 2009, currently maxed out for 2011) and contribute 6% of my salary to my 401(k) (the max for my employer's matching, they provide 33% matching up to 6%). Opened the VWELX fund last year with some money from an inheritance, and I occasionally add extra income to it once my IRA is maxed. My only debt is a mortgage (five years into a 30-year fixed 6.25% loan, $108,000 balance) and a car loan (three years into a six year 0% interest loan, $10,000 balance). Not planning to sell either in the foreseeable future. I have about $30,000 cash in savings at the moment, not counting my usual checking account buffer of a few thousand dollars. I'll be spending a few thousand dollars of that savings on an overseas vacation in a couple of months (shameful, I know  ). Just looking for advice on whether my current portfolio looks all right, and where to go from here. I'd like to have about $20k for an emergency fund, so after paying for my trip I'll have $5k-$7k of savings available for investment, plus whatever extra income I get throughout the year as usual (bonuses, side jobs, credit card cashback, etc.). So what should I do with it? Keep adding to VWELX? Put it in a new fund? Bump up my 401(k) contributions? Pay extra on the mortgage?
|
|
#
?
Mar 5, 2011 17:57
|
|
|
For the most part you sound like you are doing very well with setting yourself up. The balance on the aggressiveness of your funds is good. I would check on the 401k expense ratios on the funds to make sure they aren't unreasonable. Anything >1% you may want to look into a better option depending on what other funds your company offers. As to disposable income the general rule of thumb is to keep 6 months worth of expenses available as liquid cash. After that, my suggestion would be to pay down your mortgage. Less debt, to me, is one of the nicest things to be able to do with extra money, especially when its at 6.25% interest.
|
|
#
?
Mar 5, 2011 19:46
|
|
|
Nifty posted:For the most part you sound like you are doing very well with setting yourself up. The balance on the aggressiveness of your funds is good. I would check on the 401k expense ratios on the funds to make sure they aren't unreasonable. Anything >1% you may want to look into a better option depending on what other funds your company offers. Good tip! The fees on the funds I have are actually all reasonable; they ain't at Vanguard levels, but they're less than average for those fund types. ODVYX is 1.33%, the rest are 1.0x%. Our 401(k) is through John Hancock, so they have a pretty decent selection of funds.
|
|
#
?
Mar 5, 2011 21:26
|
|
|
How do you find ETFs? I was hoping to look at some foreign ETFs, and maybe one for gold(do they have those?), but I don't know where to start.
|
|
#
?
Mar 6, 2011 01:50
|
|
|
Zero The Hero posted:How do you find ETFs? I was hoping to look at some foreign ETFs, and maybe one for gold(do they have those?), but I don't know where to start. http://etfdb.com/ That is the place that I started researching the funds. You can sort/search by all kinds of factors.
|
|
#
?
Mar 7, 2011 15:44
|
|
|
dennyk posted:Good tip! The fees on the funds I have are actually all reasonable; they ain't at Vanguard levels, but they're less than average for those fund types. ODVYX is 1.33%, the rest are 1.0x%. Our 401(k) is through John Hancock, so they have a pretty decent selection of funds. Everyone has their own preferences and perhaps your funds are doing well, but 1.33 is high and I would say that 1.00% is still high. Beating the market by 1% is drat hard to do on a consistent basis. I am spoiled by having access to the TSP (Gov't 401K) plan with ~.025% expenses, but many others can get you in the neighborhood of .5% or less depending on the asset class. At the very least, read this http://en.wikipedia.org/wiki/Passive_management Not all strategies are for everyone, but for every Warren Buffet there are thousands of hacks who are just driving fees so they can drive a Mercedes. After actually looking up some of those I would say that you aren't too bad (could do better, but not bad), the only one that's actually above 1% according to the ETFDB is the Emerging Markets and that is a bit more understandable (emerging markets would cost more to research and understand). KennyG fucked around with this message at 17:05 on Mar 7, 2011 |
|
#
?
Mar 7, 2011 17:01
|
|
|
My husband just started his first grown up job after college and we are looking to start his 401k contributions. His company matches 50% for contributions up to 6% of his paychecks. They offer a Roth401k option which I am thinking would be better for us. I see that the general advice is to get the company match and then max out the $5000 for the RothIRA and then go back to the 401k. Since this is a Roth401k is there any reason to open a Roth IRA or is it smarter to just continue to contribute to this until we can afford to max out the $16,500 contribution limit? Since we don't really know what we are doing we planned on just investing in the Target Retirement Fund for now but we are not sure if we should pick the 2050 or the 2055 since he will turn 65 in 2053. These are the only differences between the two. 2050 Small Cap Index: 8% International Equity Index: 17% 2055 Small Cap Index: 7% International Equity Index: 18% Thanks for this thread. I am hoping to read up this year so that by next year we know what we are doing.
|
|
#
?
Mar 7, 2011 23:43
|
|
|
Ring of Light posted:My husband just started his first grown up job after college and we are looking to start his 401k contributions. His company matches 50% for contributions up to 6% of his paychecks. They offer a Roth401k option which I am thinking would be better for us. I see that the general advice is to get the company match and then max out the $5000 for the RothIRA and then go back to the 401k. Since this is a Roth401k is there any reason to open a Roth IRA or is it smarter to just continue to contribute to this until we can afford to max out the $16,500 contribution limit? Target funds are for the Target date that you wish to WITHDRAW your funds. For many people, this may be a date significantly later than retirement. I would shoot for 2055 personally, but just know that on a long enough curve it will be slightly more aggressive for slightly longer. The difference between 1% in Small Caps vs International doesn't make a significant difference. The later it is the more aggressive it will be. You could always just split the difference (and the contribution) and put 60% in the 2055 fund and 40% in 2050 giving you a 2053 fund.
|
|
#
?
Mar 8, 2011 01:34
|
|
|
KennyG posted:Target funds are for the Target date that you wish to WITHDRAW your funds. The target date is when you plan on starting to receive income from your portfolio. It is not the date you wish to liquidate your account.
|
|
#
?
Mar 8, 2011 01:44
|
|
|
I was looking at this stock, FDD aka FIRST TRUST DOW JONES STOXX EUROPEAN SELECT DIVIDEND INDEX FUND. I'm just looking for a long-term foreign ETF because I don't want all my money tied up in America's economy(directly), and it looks decent. But I don't know anything about dividends. I assume that since it's a "dividend index fund" that I'd be getting dividends, right? So, that means the stock is actually worth more than its asking price? If that's true, then it looks like a great investment at this time. I've been looking around, and most ETFs have been dropping in the short term, like this one. But I'm investing long-term so I want to go ahead and get my money in anyway.
|
|
#
?
Mar 8, 2011 05:53
|
|
|
Zero The Hero posted:But I don't know anything about dividends. I assume that since it's a "dividend index fund" that I'd be getting dividends, right? So, that means the stock is actually worth more than its asking price? Expected dividends are included in the market price of securities.
|
|
#
?
Mar 8, 2011 15:15
|
|
|
I feel like I'm saving to much for retirement, am I? I'm 24, I have $300/month, going to a 401k, currently at $7.5k and I just started a Roth IRA am I'm putting away $416/month. All together $716/month. I also put away $600 for savings that I plan on spending some time (travel, hobbies, car). I make $60k.
|
|
#
?
Mar 8, 2011 16:38
|
|
|
It's not too much, of course. But personally, I plan to eventually cut some of my contributions to my Roth IRA and start contributing to a standard, taxable fund. I just don't want ALL my money tied up until I'm 59 1/2, because I don't plan on getting there for a while.
|
|
#
?
Mar 8, 2011 16:52
|
|
|
Zero The Hero posted:It's not too much, of course. But personally, I plan to eventually cut some of my contributions to my Roth IRA and start contributing to a standard, taxable fund. I just don't want ALL my money tied up until I'm 59 1/2, because I don't plan on getting there for a while. Speaking of, I'd like to invest into Wellesley Income Fund with Vanguard in the future, it's 60% bonds and 40% stocks. It pays dividends out to the holders. I keep seeing people say these should be kept in tax advantaged accounts because the income will affect you at tax time. But if you prepare for that, say take 33% of all income from your stocks and put it into a "pay the government" account what's the big deal? problematique posted:I feel like I'm saving to much for retirement, am I? I'm wildly jealous of you. I'm 25, make 50k, and just started retirement savings. I maxed my 2010 Roth and am trying to save $1k/mo in cash. I'd suggest keep doing what you're doing, if you want to have more liquid savings figure out what the best situation is in regards to the Roth vs 401k. If $300/mo hits your company match keep doing that and maybe cut a little back on the Roth. If there is no match maybe cut back on the 401k. Increase the liquid savings split, so maybe say you're putting away $800/mo to savings, $200 to the 401k, and $316 to the Roth etc etc. Lyon fucked around with this message at 17:24 on Mar 8, 2011 |
|
#
?
Mar 8, 2011 17:20
|
|
|
Can someone point out what would be wrong with this? Want to invest in some mutual funds (just the basic ones for now such as stock market index and bond index, plus others) but can't meet the minimums (3,000) for 3 or 4 different funds . Could I get the same funds as ETF's if they have the same holdings, but no minimums? Or is such a small investment (~1000 in each fund) not worth gains/expenses? I know this may be seen as a short term investment but if the funds have the same holdings as a regular mutual fund, why not?
|
|
#
?
Mar 9, 2011 00:51
|
|
|
problematique posted:I feel like I'm saving to much for retirement, am I? I'm curious what everyone saves towards retirement here. I'll go first, I save about 30% of my gross on retirement and another 15% in shorter term savings. I still spend a decent amount on eating out and occasionally splurges, but am pretty disciplined and don't make impulse purchases. I travel a get a per diem and don't spend much of it so that definitely helps.
|
|
#
?
Mar 9, 2011 03:50
|
|
|
Anybody want to give an opinion on the strategy for my superannuation fund? Currently I don't know what I'm doing, so I'm just sticking with the 'core' strategy my super fund provides. I want to move it towards a more aggressive growth allocation soon, but so far the core strategy has been doing okay (then again "okay" in my opinion is "making more money than the costs of keeping the account").  alreadybeen: I've been trying to save more for my retirement, but since I'm a student and not even 21 just yet, I try and put in $50-$200 per fortnight into my superannuation (depending on how much I earn because I work casually). Also, today I found the Australian government gave me a $1000 match towards my retirement because I contributed towards my super last financial year. Free money rocks. froglet fucked around with this message at 04:50 on Mar 9, 2011 |
|
#
?
Mar 9, 2011 04:48
|
|
|
I save 15% in 401(k), company matches something like 2% currently, and I save ~7.5% in a Roth IRA. So that works out to ~25%. On top of that I'm slowly building up a cash/emergency reserve of 3-6 months. I also travel so while I'm traveling I don't spend more than about 50% of my salary (after the above automatic retirement savings) so that works out to be roughly 65% of my income that I "save".
|
|
#
?
Mar 9, 2011 07:10
|
|
|
velocross posted:Can someone point out what would be wrong with this? Want to invest in some mutual funds (just the basic ones for now such as stock market index and bond index, plus others) but can't meet the minimums (3,000) for 3 or 4 different funds . Could I get the same funds as ETF's if they have the same holdings, but no minimums? Or is such a small investment (~1000 in each fund) not worth gains/expenses? I know this may be seen as a short term investment but if the funds have the same holdings as a regular mutual fund, why not? Based on saying the $3000 minimum investment Im going to assume you are you talking about Vanguard. The thing to take it into account with buying ETFs is trading costs. If you want to slowly work up to getting $3000 into each fund, then be aware of the amount is costs to buying those every time. HOWEVER, if you are assuming Vanguard as your brokerage, all trades of their ETFs are free, so this point is completely negated. One thing to look at is the Vanguard Balanced Index fund. This is 60% equity index and 40% bond index. Ticker is VBINX. If you want to combine your desire for market and bond index exposure and be able to hit that $3000 threshold, this might do it for you.
|
|
#
?
Mar 9, 2011 08:23
|
|
|
Right now I'm putting about 20% of my gross income into a Roth IRA and Roth 401k. 5% goes towards short-term saving for non-retirement goals, but I'm trying to increase that by cutting down on expenses: eating out right now is about 15% of my spending.
|
|
#
?
Mar 9, 2011 14:18
|
|
|
I'm SAVING 40%, so far towards retirement I've only maxed my Roth IRA for 2010. My company doesn't match at all so I didn't bother to setup a 401k there, which I suppose is silly. I should probably throw 10% into the 401k and keep the remaining 30% in cash and use it for short term/emergency/Roth/etc.
|
|
#
?
Mar 9, 2011 14:45
|
|
|
% is a bit silly of a metric, especially if you plan on living in retirement on much less than your current salary.
|
|
#
?
Mar 9, 2011 15:34
|
|
|
Chin Strap posted:% is a bit silly of a metric, especially if you plan on living in retirement on much less than your current salary. wouldn't % be the best metric? If you save 50% of your current salary, you can retire and have the same lifestyle (mod inflation/portfolio performance).
|
|
#
?
Mar 9, 2011 15:43
|
|
|
|
| # ? Jun 9, 2024 15:03 |
|
|
Dr. Jackal posted:wouldn't % be the best metric? It all depends on what you plan on your retirement looking like. Will your house be paid off? Are you still paying for children? Can you downgrade your house even by then? Most people will have a lower cost of living in retirement then they do in their 30s especially. Also, what age you are and when you started saving are huge factors too.
|
|
#
?
Mar 9, 2011 18:46
|
|