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OK so, your $1000 emergency fund should be cash in a bank account. Also are you sure that's enough? BFC typically recommends something like three to six months of your living expenses in your emergency fund. You can have it in a high yield savings account, there's some out there right now offering around 5% APR which is pretty good, and extremely safe. Your saving up for a computer by buying stocks and stuff is also weird, it's OK if it's like, this is your gambling account and you intend to reward yourself with your winnings if you win and just not have a new computer if you lose. That said, your mix of mostly ETFs is suggestive of some confusion. We recommend a mix of domestic & international stock plus bonds for long-term investing, and by long term we mean "decades" not "months." What you are essentially doing is betting on the market as a whole, but on the order of months, and that means there's a significant chance that in a few months the market is down 20% right when you need your savings or want that computer. What will you do then? What if the market goes down and stays down for years? And thirdly: do you have a separate place where you're saving for retirement? Perhaps an IRA? If you have earned income you should probably have an IRA so you can save in a tax-advantaged way for retirement. Which is a great place to have a balance of stock and bonds, the exact balance depending on your age/years till retirement. You should be funding your long-term retirement after you have a reasonable amount of money saved for emergencies in a cash bank account. See the flowcharts halfway down the first post of the thread for more details on prioritizing your different savings options.
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Jan 4, 2024 19:40
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Leperflesh posted:
Yes. I work for the postal service so I get what's called a Thrift Savings Plan through them. As of today it's at about 54,000. As for the Robinhood account, the whole idea was putting the money somewhere that it would take a few days to withdraw so I dont just blow it on something stupid.
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Jan 4, 2024 19:50
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does robinhood offer money market funds? if you absolutely must have your emergency fund in robinhood to curb impulsiveness, a near cash equivalent like a money market fund would be the best place to park it. the stock market is an incredible driver of long term wealth, but it can be down by double digits for years. it is not the place to put money you might need at any minute
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Jan 4, 2024 19:59
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It doesn't have to be. It just seemed like a good idea at the time.
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Jan 4, 2024 20:05
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BigRed0427 posted:Yes. I work for the postal service so I get what's called a Thrift Savings Plan through them. As of today it's at about 54,000. OK so, your TSP is functionally equivalent to a 401(k), in that it's a great thing to use, but you can also have an IRA. If you want more long-term savings you can open an IRA and put money in there too, and enjoy a tax advantage. Robinhood offers an IRA option if you like. You could maybe use a high yield savings account for your "don't spend it" money because they're mostly online banks and you don't get an ATM card, you have to transfer the money somewhere to get at it. I think if you are just looking at putting away $2k over the course of a few months, going for a traditional three-fund portfolio (and then overweighting amazon and nintendo) is kinda nonsensical. I'd pick bonds for lower risk or stocks for higher gains and just run with that. Or stick to money market/cash equivalent if you don't actually want to risk your money. e. oh and I'm gonna reiterate that $1000 is inadequate as an emergency fund for most people, for example if you pay rent or something you probably want at least three to six months worth of rent.
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Jan 4, 2024 20:08
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i should mention that it's great you're thinking about and actively working towards investment goals. all plans are imperfect at some level, and not investing at all means severely limiting your long term potential wealth i think you'd benefit from looking at your goals and determining how much risk you need to take on to achieve them vs. how much risk you feel comfortable with. the optimal portfolio you can't execute on will always lose out to the sub-optimal portfolio you can consistently buy and hold also leperflesh makes a good point about the size of the emergency fund. unless you have a very robust safety net you feel comfortable falling back on. i will say that as a government employee you can probably afford to be slightly more towards the 3 months side if you feel confident that you'll never feel like jumping ship
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Jan 4, 2024 20:23
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GhostofJohnMuir posted:i should mention that it's great you're thinking about and actively working towards investment goals. all plans are imperfect at some level, and not investing at all means severely limiting your long term potential wealth Also worth mentioning on the back of these good vibes is that the decisions that you've already made are not expensive to unmake if needed. Kudos for you for getting out there and dabbling with all of this. Collect more information (all the above is gold) and adjust. Additionally, it will feel like an ENORMOUS task to get 6 months of an emergency fund together, but once it's there, it's there and can be parked somewhere earning interest (I love Fidelity's money market at like 4-5%). Then you can check off that from your financial to-do list and move to the next order of priority. This momentum forward will increase as you work toward it until you look backward and see what a strong financial foundation you've laid for yourself and how much more peace you have in regards to money. Get at it!!!
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Jan 4, 2024 20:38
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I push money out of my Fidelity account by 9am and it’s received and ready to be spent in my other bank accounts by 4pm. Just did so earlier today. If the op wants to put money into robinhood to not be able to easily access it then do keep this in mind.
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Jan 4, 2024 22:37
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I can't recommend SGOV enough as a savings account like vehicle. Because it's an ETF you can buy it at any brokerage including RH, 5.24% yield currently, accumulates value slowly and safely, and ideal for potentially transferring assets between brokerages as the shares of it can be transferred in kind and keep accumulating value in the process.
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Jan 4, 2024 22:38
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Also now is a good time to sign up for a Schwab brokerage account because they’ll give you $101 funbucks for depositing only $50. https://www.schwab.com/investing-starter-kit I just opened a Schwab account over the holidays just to get the money. The website feels nicer than Fidelity’s pos website though. E: Specifically Schwab will deposit $101 into your account after you put in $50. It then makes a purchase order for $101 worth of stocks. You can cancel the order if you want and pocket the cash or use that cash to buy Schwab’s version of VTI or whagever. Boris Galerkin fucked around with this message at 22:52 on Jan 4, 2024 |
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Jan 4, 2024 22:45
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GhostofJohnMuir posted:does robinhood offer money market funds? if you absolutely must have your emergency fund in robinhood to curb impulsiveness, a near cash equivalent like a money market fund would be the best place to park it. the stock market is an incredible driver of long term wealth, but it can be down by double digits for years. it is not the place to put money you might need at any minute Just put it in SGOV, no? Boris Galerkin posted:Also now is a good time to sign up for a Schwab brokerage account because they’ll give you $101 funbucks for depositing only $50. How long do they need to stay invested before I can pull it out? $101 free dollars seems pretty rad
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Jan 4, 2024 22:46
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Subvisual Haze posted:I can't recommend SGOV enough as a savings account like vehicle. Because it's an ETF you can buy it at any brokerage including RH, 5.24% yield currently, accumulates value slowly and safely, and ideal for potentially transferring assets between brokerages as the shares of it can be transferred in kind and keep accumulating value in the process. SGOV has really brought me around to ETFs as a concept. I mostly use money markets for cash just because of Fidelitys auto liquidate feature, but I keep my more discretionary savings in SGOV and I recently dropped my target date fund on favor of manually balancing my retirement portfolio across the vanguard total market ETFs.
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Jan 4, 2024 22:48
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jokes posted:Just put it in SGOV, no? I pulled it out the next day. They specifically say in the FAQ that you’re “allowed” to do this. E: I reread it and the terms there’s no language about cashing out, but it tells you how to cancel the $101 purchase order and says that you can instead save the cash or invest it in something else. I guess there’s a chance that they can claw back the $101 but at the same time it also doesn’t specific a minimum time to keep the account. Boris Galerkin fucked around with this message at 22:54 on Jan 4, 2024 |
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Jan 4, 2024 22:49
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I mean, I'm not against $100 of free AAPL regardless
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Jan 4, 2024 22:55
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jokes posted:I mean, I'm not against $100 of free AAPL regardless Hell yeah and if it costs you nothing (you don’t have to invest the $50 you deposit) then it’s like… infinite gains.
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Jan 4, 2024 22:58
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$50 into SGOV, $101 into AAPL, and it works for existing Schwab customers? Hot tip!
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Jan 4, 2024 23:00
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jokes posted:Just put it in SGOV, no? that'd also work
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Jan 4, 2024 23:22
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I haven't used vanguard for brokerage accounts before. Is it normal for it to open with portfolio alerts after picking etfs?
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Jan 4, 2024 23:58
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jokes posted:$50 into SGOV, $101 into AAPL, and it works for existing Schwab customers? Hot tip! Does it? Thought it was for new Schwab customers only but if it does then hey, that’s great.
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Jan 5, 2024 00:07
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Subvisual Haze posted:I can't recommend SGOV enough as a savings account like vehicle. Because it's an ETF you can buy it at any brokerage including RH, 5.24% yield currently, accumulates value slowly and safely, and ideal for potentially transferring assets between brokerages as the shares of it can be transferred in kind and keep accumulating value in the process.
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Jan 5, 2024 00:19
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Boris Galerkin posted:Does it? Thought it was for new Schwab customers only but if it does then hey, that’s great. Looks like only new ones. "Schwab Stock Slices" is pretty nice branding.
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Jan 5, 2024 00:22
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I just signed up for it without issue and I use Schwab otherwise. I did have to sign up for a new account but that’s nbd. e: Schwab posted:The Schwab Starter Kit™ offer is only available to eligible new customers. To be eligible to receive the $101 cash bonus, you must be an individual who does not have a Charles Schwab & Co., Inc. ("Schwab") account (other than a Schwab Stock Plan Services account) and who: (1) opens a Schwab One individual taxable retail brokerage account and (2) deposits at least $50 into that account within 30 days of enrolling in the offer (only outside assets new to Schwab qualify; assets transferred from affiliates other than Schwab Retirement Plan Services are excluded). Nevermind I don't think I'll be getting the money -- dang! jokes fucked around with this message at 00:28 on Jan 5, 2024 |
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Jan 5, 2024 00:25
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No Pants posted:Some nerds are using BOXX as a money market/SGOV/etc. replacement since distributions will be both rare and (theoretically) mostly long-term capital gains. I was about to post this too. The tax treatment is currently "not sure", because they are getting a little creative with the use of box spreads (a set of options that basically returns something close to the fed funds rate). There seems to be some disagreement on the correct way to tax the ETF that wraps these contracts and fund holders could get a nasty surprise if the IRS decides the fund has not correctly reported the tax liability. People really shouldnt be investing in things they dont understand, and this one is unproven and a bit exotic. Also keep in mind that while the return is ideally similar to holding t-bills, its not the same risk. There is some counterparty risk with options that doesnt exist with a treasury ETF. BOXX is also not state tax exempt.
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Jan 5, 2024 00:41
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Boris Galerkin posted:Awesome I needed something to listen to at work today.
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Jan 5, 2024 02:08
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jokes posted:I just signed up for it without issue and I use Schwab otherwise. I did have to sign up for a new account but that’s nbd. I just set up custodial accounts for my kids two days ago, need to see if they qualify.
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Jan 5, 2024 02:15
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Boris Galerkin posted:Awesome I needed something to listen to at work today.
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Jan 5, 2024 02:29
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The "I" in VTI stands for "inside the borders of the united states"
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Jan 5, 2024 02:34
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Subvisual Haze posted:VTI is VT without international. (???) Functionally yes, literally no. They follow different indexes, so VTI+VXUS actually has significantly more holdings than VT (approx 12300 vs 9700).
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Jan 5, 2024 02:50
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jokes posted:The "I" in VTI stands for "inside the borders of the united states" Obviously. I think that's actually wrong but I didn't pay much attention in history class.
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Jan 5, 2024 05:02
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moana posted:For that I just think "Vasco de gama Thought it was India" that's good, because without the history knowledge you won't go chasing past performance.
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Jan 5, 2024 07:30
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Sorry if this is the wrong thread but I have a “how should I be moving money around?” question… I resigned from a toxic job and my last day will be in a month. I have no debt, and hope to be able to replace my income in the next 6 months or so. Partner and I rent. I have 4 months of expenses in liquid HYSA. I have another 25 months of expenses in my brokerage account invested. (Additionally, I’m 40 years old and I have about 11x annual expenses in my retirement accounts, so saving for retirement is not a concern.) How should I be thinking about my money during this unemployed time? Should I sell off monthly from my brokerage to keep n months of expenses liquid? Or only sell my brokerage once I’ve burned through my HYSA? Or something else? dexter6 fucked around with this message at 08:55 on Jan 5, 2024 |
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Jan 5, 2024 08:52
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dexter6 posted:Sorry if this is the wrong thread but I have a “how should I be moving money around?” question… Assuming your brokerage investments are in stock/bond index funds, liquidity isnt going to be a problem. But since those brokerage investments are presumably long term investments, they will be much more volatile than your HYSA, so they arent ideal for short term expenses. To answer the question: if I were going to be unemployed for some number of months, I would want to keep that amount of money in cash or cash-equivalents (savings, money market, ultra short treasuries, etc). I wouldnt wait until you spend your savings to sell off from the brokerage account. If you are unemployed longer than expected and the market is down, I would really want to have that safe cash.
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Jan 5, 2024 16:21
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Might be a good opportunity to offset some capital gains with losses in your brokerage account, if applicable. I would probably do something in this sequence: 0) Defer any unnecessary one-time expenses 1) Take an opportunity to look at recurring expenses and reduce where possible. 2) Turn off dividend reinvestment from the brokerage account and take that as cash 3) Do some offsetting sales of assets in brokerage to minimize tax burden (if applicable) 4) Wait for bonds/other fixed income to mature and not rebuy (if applicable) 4) Draw down emergency fund in some proportion along with sale of assets in brokerage
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Jan 5, 2024 16:29
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TraderStav posted:I just set up custodial accounts for my kids two days ago, need to see if they qualify. Schwab says you must be 18 years old to qualify. I tried to set up an account for my 3 year old. Maybe he really likes investing?!?
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Jan 5, 2024 18:50
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Thank you everyone for the advice. I'm gonna go ahead and close out my Robinhood account and open an actual savings account and build that up. Then I just gotta practice some self discipline and not pull from it on a whim. I also gotta get my credit cards paid off.
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Jan 5, 2024 19:29
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BigRed0427 posted:Thank you everyone for the advice. I'm gonna go ahead and close out my Robinhood account and open an actual savings account and build that up. Then I just gotta practice some self discipline and not pull from it on a whim. Oh gently caress yeah pay those off first before almost anything else. Make a BFC thread or post in the one where people talk about things like that or something.
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Jan 5, 2024 20:17
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But also, great on you for taking action and making an effort here!
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Jan 5, 2024 20:17
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BigRed0427 posted:Thank you everyone for the advice. I'm gonna go ahead and close out my Robinhood account and open an actual savings account and build that up. Then I just gotta practice some self discipline and not pull from it on a whim. See the flowchart in the OP of the Newbies thread, might help: https://forums.somethingawful.com/showthread.php?threadid=3256838
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Jan 5, 2024 21:54
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Awkward Davies posted:See the flowchart in the OP of the Newbies thread, might help: https://forums.somethingawful.com/showthread.php?threadid=3256838 same as flowcharts in this thread's OP, I put them in both places 
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Jan 5, 2024 23:20
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pmchem posted:same as flowcharts in this thread's OP, I put them in both places 
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Jan 6, 2024 01:52
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