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I am 32 and am going back and looking at my contribution elections for my 401k through Fidelity. I have them set up like this right now: Target Date 2045: 50% Vanguard Institutional Index Fund Institutional Plus (VIIIX): 50% I had it all in the Target Date 2045 fund until earlier this year I set VIIIX to 50% just because VANGUARD and the low expense ratio. I'm thinking 50% for VIIIX is a bit much since there's already a large percent of stock in the Target Fund. Here are all my options: pre:Name/Inception Date Asset Class Category Gross Expense Ratio** Fees TARGET DATE FUNDS - show details.- hide details. 401K GLOBAL DIVERS 01/03/1989 Blended Fund Investments* Asset Allocation 1.25% TARGET DATE 2005 04/01/2008 Blended Fund Investments* Asset Allocation 1.08% TARGET DATE 2010 01/01/2010 Blended Fund Investments* Asset Allocation 1.09% TARGET DATE 2015 04/27/2004 Blended Fund Investments* Asset Allocation 1.08% TARGET DATE 2020 12/01/2009 Blended Fund Investments* Asset Allocation 1.06% TARGET DATE 2025 04/27/2004 Blended Fund Investments* Asset Allocation 1.07% TARGET DATE 2030 07/01/2011 Blended Fund Investments* Asset Allocation 1.07% TARGET DATE 2035 04/27/2004 Blended Fund Investments* Asset Allocation 1.07% TARGET DATE 2040 07/01/2011 Blended Fund Investments* Asset Allocation 1.07% Investments you currently own TARGET DATE 2045 04/27/2004 Blended Fund Investments* Asset Allocation 1.07% TARGET DATE 2050 07/01/2011 Blended Fund Investments* Asset Allocation 1.07% TARGET DATE 2055 07/31/2013 Blended Fund Investments* Asset Allocation 1.07% TARGET DATE INCOME 04/27/2004 Blended Fund Investments* Asset Allocation 1.08% CORE FUNDS - show details.- hide details. FID GROWTH CO POOL 12/13/2013 Stock Investments Large Cap Growth 0.43% LARGE CAP US STOCK 04/19/2004 Stock Investments Large Cap Blend 0.27% VANG INST INDEX PLUS (VIIIX) 07/31/1990 Stock Investments Large Cap Blend 0.02% DODGE & COX STOCK (DODGX) 01/04/1965 Stock Investments Large Cap Value 0.52% FID LOW PR STK POOL 03/14/2014 Stock Investments Mid-Cap Blend 0.48% Short term trading fees of 1.5% for fee eligible shares held less than 90 days. BTC RUSSELL 2500 09/30/2008 Stock Investments Small Cap Blend 0.03% SMALL CAP US STOCK 04/27/2004 Stock Investments Small Cap Blend 0.52% AF EUROPAC GROWTH R6 (RERGX) 04/16/1984 Stock Investments Foreign 0.49% BTC ACWI EX US IMI 02/28/2011 Stock Investments Foreign 0.10% INTERNATIONAL STOCK 04/27/2004 Stock Investments Foreign 0.55% BTC EMERGING MKTS 12/07/2008 Stock Investments Diversfd Emerging Mkts 0.10% LAZARD EMERG MKTS EQ 08/31/2006 Stock Investments Diversfd Emerging Mkts 0.83% BTC US DEBT 06/06/1996 Bond Investments Intermediate-Term 0.02% GLOBAL BOND FUND 04/27/2004 Bond Investments Intermediate-Term 0.59% PIM TOTAL RT INST (PTTRX) 05/11/1987 Bond Investments Intermediate-Term 0.46% STABLE VALUE FUND 03/31/1990 Bond Investments Stable Value 0.32% INV GOVT & AGCY PRT (AGPXX) 09/01/1998 7 day yield as of 06/30/2014 0.01% Short Term Investments Short Government 0.14% Henrik Zetterberg fucked around with this message at 17:01 on Jul 16, 2014 |
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Jul 16, 2014 16:31
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Henrik Zetterberg posted:I am 32 and am going back and looking at my contribution elections for my 401k through Fidelity. I have them set up like this right now: Your selection looks suspiciously like mine... The Vanguard and BTC funds are your best options for a low ER, highly diverse portfolio. The Target Fund is eating about 1% more than you should pay by managing yourself. Put about 50-60% into Vanguard and BTC Russell 2500, about 20-30% into BTC ACWI/Emerging, and 10-20% into BTC US Debt. Percentages will vary based on your risk tolerance, of course.
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Jul 16, 2014 16:58
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Yeah the ER on the Target Date 2045 is what made me originally re-balance from 100% to 50/50. I suppose there's no reason to keep money in it if I'm picking my own.
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Jul 16, 2014 17:02
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moana posted:Yeah, if you're set on really getting ahead and possibly hitting financial independence early, I would work from a chart like Financial Samurai's instead: http://www.financialsamurai.com/how-much-should-one-have-in-their-401k-at-different-ages/ There's a lot of  ing at the government on this site, and this guy's insistence that you drop $17,500 into your 401k with zero qualifications (while foregoing ROTH contributions) makes me suspect that the average person is not the target audience.
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Jul 16, 2014 17:06
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Not a Children posted:There's a lot of he also seems to have a lot of endorsements that are actually affiliate links. Roth 401k seems like a no brainer to me, especially if you're relatively young.
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Jul 16, 2014 17:11
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Mr. Glass posted:any thoughts on my portfolio? it's a 401k so my options are limited; am I being an idiot by choosing funds myself instead of just using Vanguard's retirement target fund? quote:In terms of portfolio, I'm essentially split evenly among VBMPX, VWIAX, VEMPX, and VTPSX. Just so we're clear, this is the portfolio you're talking about right? And those funds are Vanguard Total Bond Market, Vanguard Wellesley Income, Vanguard Extended Market (which tracks S&P Completion Index), Vanguard Total Int'l Stock (which tracks FTSE Global ex-US)? I think most people in this thread would characterize that as an extremely risk-averse portfolio. You're like 35% bonds right now, for one thing. Also I'm pretty sure you have exposure to every stock in the world except the S&P 500, if I'm reading this correctly, which is totally bizarre. I would say you seem to have given very little thought to this mix, so I would recommend using a Vanguard Target Retirement Date fund and learning a bit more about mutual funds in general. Edit: 42% bonds actually Second edit: For context, I am the same age as you and I have 25% in bonds, and most people in this thread consider that to be really high. I suspect the average recommendation around these parts for a 27-year-old might be somewhere around 10% in bonds. Third edit, because I'm edit-happy today: Technically, you're not totally lacking U.S. large-cap exposure because there's some in the Wellesley Income Fund, basically 1/3 of that 25%, but that's a really low amount unless you have a strong negative view on U.S. large-cap equities (which would of course be market-timing). Echo 3 fucked around with this message at 18:33 on Jul 16, 2014 |
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Jul 16, 2014 18:22
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Cool, thanks, this is what I needed to hear. I'm going to put everything back in the target fund and then dole out smaller amounts to other funds as I learn more.
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Jul 16, 2014 18:38
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Mr. Glass posted:Yes, I think I should have tackled that before buying a house, but what's done is done. Ideally I would like to stay on the retirement track while killing the student loans due to the aforementioned employer match; with some slight lifestyle tweaks I think it's doable. Also, you're young. Go with more like 10% bonds... If you want to be über conservative, no more than your age in bonds. I think that's very much overly conservative though. Henrik Zetterberg posted:Yeah the ER on the Target Date 2045 is what made me originally re-balance from 100% to 50/50. I suppose there's no reason to keep money in it if I'm picking my own. SiGmA_X fucked around with this message at 19:52 on Jul 16, 2014 |
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Jul 16, 2014 19:48
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The housing market here is on an upswing so I think we bought at the right time. We also put 20% down and did some pretty major renovations (remodeled the kitchen) out of pocket that will hopefully add quite a bit of value. In general it's more cost effective to buy than rent in this area, although it wouldn't surprise me if that changes in the next few years.
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Jul 16, 2014 19:53
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Not a Children posted:There's a lot of
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Jul 16, 2014 19:56
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ETB posted:Your selection looks suspiciously like mine... Ha, I just noticed that if I click on my Target Fund, it shows 1.07% ER... then in small text under it, "0.72% management fee." Eat balls. What's a good split between large/small cap stocks? Right now I plan on splitting it down the middle, but was wondering if I should gear it a bit more toward large. Here's what I have planned right now: 60% US Stock - 30% Vanguard (large cap) - 30% BTC Russell 2500 (small cap) 30% Int'l Stock - 15% BTC ACWI Int'l Stock - 15% BTC Emerging 10% Bonds - 10% BTC US Debt I figure I'll re-balance to 15% bonds when I hit 35 or so.
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Jul 17, 2014 00:12
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edit: I'm retarded.
Nail Rat fucked around with this message at 15:39 on Jul 17, 2014 |
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Jul 17, 2014 14:01
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I'm about to get some chunks of money, and I'm thinking of putting it into a no fee index fund. I assume that it's better to spread the deposits, than to put everything in at once? Let's say I have 5000 dollars to put in, should I do 500 a month, 1000 a month? 500 twice a month? Or am I over thinking it?
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Jul 17, 2014 14:58
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Probably over thinking it. In the long run it won't matter much. Plus you have no way of knowing if the market is going to move significantly between now and when you'd hypothetically invest the smaller chunks.
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Jul 17, 2014 15:02
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I'm not going to sit and wait for downs in the market and buy in, I'm thinking more of just putting a auto buy at a date every month and leaving it. Shouldn't it spread the risk a bit? Putting in 5k at one point seems more risky. But then again, since my bank offers poo poo rates, I guess taking too long at putting the money in is a waste.
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Jul 17, 2014 15:05
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Probably won't matter much one way or the other. If you do it all at once you have the benefit of only paying one commission.
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Jul 17, 2014 15:08
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edit: I'm retarded.
Nail Rat fucked around with this message at 15:39 on Jul 17, 2014 |
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Jul 17, 2014 15:10
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Nail Rat posted:It all depends on your risk tolerance, but IIRC the bottom line from both Four Pillars and Random Walk Down Wall Street was it's better to either do a total stock market index like the Wilshire 5000 or, if you're going to play with the percentages, weight more towards large cap than small cap. In the same way that an individual index makes sense, indexing the whole stock market makes sense too(with some tweaks if you're willing to take more risk for greater potential gains). The Four Pillars of Investing posted:The splitters say, “Look at the historical data. Value stocks have I honestly doubt it makes all that much difference in the end... Also I'd only recommend even considering it if you have access to extremely small expense options (VSIAX, for example). I weight slightly riskier with some small cap exposure and always question if it is worth the extra overhead at re-balancing time because I only have a good fund in my Roth.
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Jul 17, 2014 15:34
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Fancy_Lad posted:I honestly doubt it makes all that much difference in the end... Also I'd only recommend even considering it if you have access to extremely small expense options (VSIAX, for example). I weight slightly riskier with some small cap exposure and always question if it is worth the extra overhead at re-balancing time because I only have a good fund in my Roth. Well poo poo, I completely misremembered where I'd heard that logic then. Oops.
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Jul 17, 2014 15:39
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I have been considering changing my allocations to include more small cap, but thus far I haven't done anything. If today is as slow as I hope it is, maybe I'll research and decide on an allocation to go with...
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Jul 17, 2014 17:15
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MrOnBicycle posted:I'm not going to sit and wait for downs in the market and buy in, I'm thinking more of just putting a auto buy at a date every month and leaving it. Shouldn't it spread the risk a bit? Putting in 5k at one point seems more risky. But then again, since my bank offers poo poo rates, I guess taking too long at putting the money in is a waste. It doesn't spread the risk, yes you are reducing the volatility but it's not worth the expected-value hit. The difference is tiny though, so if it makes you feel better, feel free to spread it out. For the mathematical reasons behind it you can read the Wiki article here: http://en.wikipedia.org/wiki/Dollar-cost_averaging specifically the "Criticism" and "Confusion" sections, but basically it's easy to see if you think about it this way: Imagine you had a million dollars, and were considering whether to "spread out" your investment over the next twenty years, or just put it all in today. It should be clear that in a world with positive expected returns to investing, you will be much better off investing it all today. Reducing the time period down to a shorter one doesn't change the math, it just makes the "wrong choice" hurt you less.
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Jul 17, 2014 18:27
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Ok, thanks! I'm getting the money in installments, so I might as well get the money funneled into the broker asap and buy into the index fund with the whole lump sum then. First load on the way!
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Jul 17, 2014 20:46
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MrOnBicycle posted:Ok, thanks! Rather than worrying about whether to put it in all at once or a bit at a time, you should be worrying about what the portfolio is going to be and what the broker fees are. "No fee index fund" doesn't answer either of those questions and such a thing probably doesn't actually exist in the first place. Is this your student loan money that you decided a few months ago to keep in a nice risk-free savings account?
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Jul 17, 2014 21:00
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I just started my first real job recently and the 401k they are offering lets me do a traditional 401k or a Roth 401k. I'm 25 and otherwise have just started my savings, just an emergency fund and a few hundred bucks in a Roth IRA, no debt, so I'm about as blank a slate as you can get. At this point, is it better to do one or the other?
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Jul 17, 2014 23:21
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Frinkahedron posted:I just started my first real job recently and the 401k they are offering lets me do a traditional 401k or a Roth 401k. I'm 25 and otherwise have just started my savings, just an emergency fund and a few hundred bucks in a Roth IRA, no debt, so I'm about as blank a slate as you can get. At this point, is it better to do one or the other? Age 25, first real job, starting in July... smash it into a Roth as hard as you can. Your tax rates will (we hope) never be this low again. You'll pay taxes on the income now, but not on the gains, and you have decades to make up the small up-front hit. Depending on how much you make, how much you think a VAT/national sales tax is likely in the far future, and your personal preferences, you might want to adjust it in the new year to be split between the two, but Roth is the way to go right now.
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Jul 17, 2014 23:32
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MrOnBicycle posted:I'm about to get some chunks of money, and I'm thinking of putting it into a no fee index fund. I assume that it's better to spread the deposits, than to put everything in at once? Let's say I have 5000 dollars to put in, should I do 500 a month, 1000 a month? 500 twice a month? Or am I over thinking it? Vanguard white paper recommends doing lump sum investments if you plan to hold the investments for a long time. All dollar case average does is reduce short term risk at the expense of decrease long term overall yield.
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Jul 18, 2014 00:07
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Didn't see this in the OP... I file jointly with my wife. There's no reason for us to make two separate Roth IRA accounts, right? The limit is aggregate between the two of us, right?
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Jul 18, 2014 05:52
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RICHUNCLEPENNYBAGS posted:Didn't see this in the OP... I file jointly with my wife. There's no reason for us to make two separate Roth IRA accounts, right? The limit is aggregate between the two of us, right? No, you both have your own Individual Retirement Account contribution limits.
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Jul 18, 2014 06:01
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etalian posted:Vanguard white paper recommends doing lump sum investments if you plan to hold the investments for a long time. How big of a difference was the returns for lump sum vs monthly?
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Jul 18, 2014 06:49
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.Z. posted:How big of a difference was the returns for lump sum vs monthly? The difference should amount to slightly less than 6 months worth of returns.
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Jul 18, 2014 07:29
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slap me silly posted:Rather than worrying about whether to put it in all at once or a bit at a time, you should be worrying about what the portfolio is going to be and what the broker fees are. "No fee index fund" doesn't answer either of those questions and such a thing probably doesn't actually exist in the first place. Nice memory! No, this isn't my student loan money. This is an unexpected chunk of money that my dad held for me, and we finally got around to transferring over to me for me to handle. As for the no fee index fund, it's actually a thing. It's a fund that my broker set up (probably as a marketing thing) that has no fees at all. It follows the SIX30RX (Stockholm) index, and is actually pretty successful. It's kind of high risk (6 / 7 according to their own evaluation). The fund itself consists of the 30 stocks with the biggest turnover on the SIX30RX market. The student loan money was kept and is still kept in a risk-free savings account.  As the index that the fund follows tells, I'm not in the US, but in Sweden. MrOnBicycle fucked around with this message at 07:54 on Jul 18, 2014 |
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Jul 18, 2014 07:46
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Yond Cassius posted:Age 25, first real job, starting in July... smash it into a Roth as hard as you can. Your tax rates will (we hope) never be this low again. You'll pay taxes on the income now, but not on the gains, and you have decades to make up the small up-front hit. Depending on how much you make, how much you think a VAT/national sales tax is likely in the far future, and your personal preferences, you might want to adjust it in the new year to be split between the two, but Roth is the way to go right now. To be clear, I agree but only because of the starting in July aspect. Roth vs Traditional is a decision that depends strongly on individual situation (income, age, expenses) in my opinion. antiga fucked around with this message at 20:00 on Jul 18, 2014 |
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Jul 18, 2014 19:56
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.Z. posted:How big of a difference was the returns for lump sum vs monthly? For a long term window lump sum was higher by 2.2%.
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Jul 19, 2014 01:47
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Not a Children posted:There's a lot of With his assumptions, it's pretty safe to say he's targeting that towards high earners where maxing out a 401k makes more sense. He doesn't say it explicitly, but anyone who is maxing out their 401k is more likely than not to be in the 25% bracket unless they have a really favorable living environment.
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Jul 19, 2014 16:37
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Not a Children posted:There's a lot of His article on why you should not contribute to Roth IRAs make me think this guy is a government hating yahoo and a financial idiot, and that everyone should ignore anything this crazy person says. Seriously, just read (or don't) this article http://www.financialsamurai.com/disadvantages-of-the-roth-ira-not-all-is-what-it-seems/, almost every point he makes about Roth IRAs is financially wrong or raw government hating paranoia. He fails to mention: the likelihood of tax rates changing between now and retirement, the ability of high income makers to use the backdoor Roth IRA method, the greater flexability in controlling withdrawals from a Roth relative to a Traditional, and most of his other points are just "gently caress the government".
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Jul 19, 2014 17:23
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The one that really got to me was the 1/10th rule for transportation. I know Dave Ramsey's budget also has 10% for transportation, it's Financial Samurai's reasons that pissed me off. Mainly that if you spend more than that, you'll have higher stress and an inability to not spend money on other stuff (i.e. if you just bought a new Accord, clearly you MUST spend money on a brand new watch to match it). I mean poo poo, he says if you buy a new car then you'll have to use valet service when parking your car because everyone needs to SEE YOU IN YOUR NEW CAR. It actually got me thinking..if you're limited to 10% for transportation, is that even feasible? Let's say you make $40k a year; the 10% rule says you shouldn't spend more than $4k. Taking the average cost of insurance, maintenance and gas, that comes out to 7.6% of your annual salary right there. It ignores reality and any utility you may get from transportation. Obviously, if you make $40k you shouldn't finance a brand new Camry at a high interest rate. But finding a car for the amount left? Good luck.
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Jul 19, 2014 18:07
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Omne posted:The one that really got to me was the 1/10th rule for transportation. I know Dave Ramsey's budget also has 10% for transportation, it's Financial Samurai's reasons that pissed me off. Mainly that if you spend more than that, you'll have higher stress and an inability to not spend money on other stuff (i.e. if you just bought a new Accord, clearly you MUST spend money on a brand new watch to match it). I mean poo poo, he says if you buy a new car then you'll have to use valet service when parking your car because everyone needs to SEE YOU IN YOUR NEW CAR. Financial Samurai is a really retarded website overall
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Jul 19, 2014 18:09
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4k probably is pretty low, but doable with a large enough downpayment. We are well below the 10% mark for two cars and the required insurance. One car was bought used and the other new, both are what I would call reasonably priced, Subaru base models. I would guess they are making a case against the millions of people driving cars that cost as much as their yearly income.
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Jul 19, 2014 18:22
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Ropes4u posted:4k probably is pretty low, but doable with a large enough downpayment. We are well below the 10% mark for two cars and the required insurance. One car was bought used and the other new, both are what I would call reasonably priced, Subaru base models. Oh I completely agree, and I've done that before. My first job out of college I made $30k/year, and I financed a new Jeep for $20k at 8.55% over 72 months. It was sometime around year two that it hit me how friggin stupid that was. It's been paid off for a few years now, and the annual repairs I have to make are way, way less than what my monthly payment used to be. I'll drive it until it dies, then replace it with someone sensible. But seriously; average car insurance is 2% of spending, average gas costs are 4% and average maintenance is 1.5%. That eats up 7.5% of the 10% recommended. How can you find a car for $1k if you only make $40k? Don't do what I did (monthly payments around 25% of my monthly take home pay), but you're probably going above 10%.
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Jul 19, 2014 18:26
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Omne posted:It actually got me thinking..if you're limited to 10% for transportation, is that even feasible? Let's say you make $40k a year; the 10% rule says you shouldn't spend more than $4k. Taking the average cost of insurance, maintenance and gas, that comes out to 7.6% of your annual salary right there. It ignores reality and any utility you may get from transportation. Obviously, if you make $40k you shouldn't finance a brand new Camry at a high interest rate. But finding a car for the amount left? Good luck. You can lease a new Smart Fortwo for $99/month if you don't mind a Smart Car. With the $999 down payment factored into the monthly payments it's $127/month, not including gas and insurance.
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Jul 19, 2014 18:30
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