- 1,987
- 568
- Joined
- Jul 18, 2008
Cosign Vanguard for IRA.
NT: Official Personal Finances Thread
- 12,879
- 8,596
- Joined
- May 31, 2006
What he said although I use Capital One Investing for my Roth.
- 926
- 1,831
- Joined
- Jul 7, 2006
Hey guys, thanks for the tips in this thread. It really makes me think about long-term financial stability.
Looking for suggestions regarding whether my current saving and investment strategy is sensible for someone in my position.
Currently a grad student, making 33K a year. After rent/cable/sending money to my parents are paid off every month, I still have about $700 that I put away automatically. I'll be graduating with 2 professional degrees and zero debt, but I want to establish good saving and investing habits now. Hopefully when I get a real job and am paid substantially more, I can keep saving and investing the same percentage.
I have $300 that I put into 3 different mutual funds that I have with T Rowe Price ($100 each)
And an additional $200 that I put into a mutual fund with Wells Fargo
The other $200 goes into my online savings for my emergency fund, which is currently sitting at about 3K.
My concerns are regarding liquidity. I understand that 3K isn't a lot in cash, and that I should probably save up more for my emergency fund, but I also want to contribute to my long-term investments.
I see that a lot of people in here are high on Vanguard. The low expense ratio is appealing, but how much of a hassle would it be to move all my investments from T Rowe to Vanguard?
Any advice regarding saving vs. investing would be helpful as well.
Thanks!
Looking for suggestions regarding whether my current saving and investment strategy is sensible for someone in my position.
Currently a grad student, making 33K a year. After rent/cable/sending money to my parents are paid off every month, I still have about $700 that I put away automatically. I'll be graduating with 2 professional degrees and zero debt, but I want to establish good saving and investing habits now. Hopefully when I get a real job and am paid substantially more, I can keep saving and investing the same percentage.
I have $300 that I put into 3 different mutual funds that I have with T Rowe Price ($100 each)
And an additional $200 that I put into a mutual fund with Wells Fargo
The other $200 goes into my online savings for my emergency fund, which is currently sitting at about 3K.
My concerns are regarding liquidity. I understand that 3K isn't a lot in cash, and that I should probably save up more for my emergency fund, but I also want to contribute to my long-term investments.
I see that a lot of people in here are high on Vanguard. The low expense ratio is appealing, but how much of a hassle would it be to move all my investments from T Rowe to Vanguard?
Any advice regarding saving vs. investing would be helpful as well.
Thanks!
Last edited:
- 4,758
- 1,409
- Joined
- Nov 6, 2012
From what I have heard, transferring funds from another IRA to Vanguard is a pretty simple process.
antidope
Supporter
- 62,306
- 65,062
- Joined
- Jan 2, 2012
http://www.bloomberg.com/news/artic...nvesting-robot-could-juice-your-returns-by-15
While on the subject of IRAs i keep mine at betterment along with a portion of my retail assets. This new feature surrounding tax sensitive investing is great because that's how I think about my portfolio to begin with, holistically and at least make an attempt to be tax sensitive.
The majority of it is vanguard assets as it is, that's the company they lean on, Idk what the all in fee is haven't done the analysis but the advisory fee is 25BPS which is nothing.
The performance has been stellar too since I've been in it so it's worth it to me.
While on the subject of IRAs i keep mine at betterment along with a portion of my retail assets. This new feature surrounding tax sensitive investing is great because that's how I think about my portfolio to begin with, holistically and at least make an attempt to be tax sensitive.
The majority of it is vanguard assets as it is, that's the company they lean on, Idk what the all in fee is haven't done the analysis but the advisory fee is 25BPS which is nothing.
The performance has been stellar too since I've been in it so it's worth it to me.
- 3,949
- 1,197
- Joined
- Nov 16, 2001
Them & American Funds are at or near the top. But American Funds are typically sold through brokers which may be a good option since you'll be paying the same expenses anyways and you get the benefit of getting advice with your portfolio too.
- 3,949
- 1,197
- Joined
- Nov 16, 2001
Cap out your EF now. Nothing's worse than having an emergency then having to pull from retirement accounts. With what you're talking about, it would only be a couple months lost from investing and you're sitting on a nice insurance cushion for WHEN trouble comes. 75% of us will experience a major financial event within any 10 year period so it's best to buy the umbrella now because the storm is coming.
I like to diversify into 4 different mutual fund buckets. Small cap, large cap, dividend, & international stocks. That way you have a mix of stability, income/cash flow, & growth coming in and you're also not going to cross over between funds that are investing in the same companies.
Sounds like you're on a good track though. Income isn't too high yet, but you're saving a lot more than most people so that puts you in pretty good shape.
- 8,991
- 13,566
- Joined
- Jan 4, 2014
Fellas can anyone recommend a low risk kinda lazy investment tool for a kids college fund. I'll have to do my heavy research before I really make a move but wanted to see if anyone had any advice. I've been stashing away little by little for my little guy but I feel like I could be making that money work for me while it's just sitting in a savings account.
- 12,571
- 27,188
- Joined
- Aug 9, 2014
^ I dont know where you live or if this is in other states but in FL they have something called a FL Prepaid plan. Basically you enroll in it and it will lock in todays college tuition rates for when my kids go to college. So I decided not to worry about a 529 plan and getting good returns, and beating the rate of tuition increases. I have no idea how much college will be when they go but some predictions are astronomical (like seemingly unreal). This was a safe and lazy option for me. I wonder if its in other states though....
- 3,949
- 1,197
- Joined
- Nov 16, 2001
The problem with those is you're pretty much locked into going to a Florida state school. So many variables that could make that a bad investment.
To the original question, an Educational Savings Account and/or a 529 account. You don't even have to pick your state's 529 plan (and you probably shouldn't unless you're in a few select states). The nice thing about a 529 is that it can be passed down to another child or put towards other educational expenses tax free. It's basically an IRA for college savings. Just set up an appointment with a good advisor and pick a fund with a long history (15+ years) and you should be in pretty good shape. You're right... a savings account isn't going to get you very far. My grandparents saved $1500 for me from recycling cans and put it in a savings account for college. Lord only knows how much it would have been worth if they would have invested in something with a decent return.
- 4,758
- 1,409
- Joined
- Nov 6, 2012
Yeah that's what I was thinking. Who's to say your child wants to go to a Florida school?
The problem with those is you're pretty much locked into going to a Florida state school. So many variables that could make that a bad investment.
To the original question, an Educational Savings Account and/or a 529 account. You don't even have to pick your state's 529 plan (and you probably shouldn't unless you're in a few select states). The nice thing about a 529 is that it can be passed down to another child or put towards other educational expenses tax free. It's basically an IRA for college savings. Just set up an appointment with a good advisor and pick a fund with a long history (15+ years) and you should be in pretty good shape. You're right... a savings account isn't going to get you very far. My grandparents saved $1500 for me from recycling cans and put it in a savings account for college. Lord only knows how much it would have been worth if they would have invested in something with a decent return.
Also what's the advantage of choosing a 529 over a regular investment account?
I heard a very interesting/creative college fund investment on Bigger Pockets. The guy bought a property (20K down payment) with a 18 year mortgage and is renting it out , so the tenants are paying the mortgage off over the term of the loan. Once the property is paid off he will sell it to pay for college. Estimated value should be close to 300K after 18 years. I like this type of investing, invest to pay for bills/liabilities instead of dropping cash.
Last edited:
- 12,571
- 27,188
- Joined
- Aug 9, 2014
I hear what you guys are saying and considered that before making my decision.
My thoughts are that I want to give my daughters a headstart/advantage, which I didnt get from my folks. I worked since I was 16 and all through college to make ends meet, and that helped me understand the value of a dollar and the importance of accountability. Basically Im gonna give them a Camry, and if theyre driven and ambitious enough to want the Benz, they can work to make up the difference. The experiences i gained working for everything i had was priceless and i dont want to deprive them of that.
With that said, if they need me to pay for 4 years at Princeton, Ill be able to do that too. Maybe my thoughts will change when its time (theyre only 6 and 2 now). Also, theres options for out of state and private schools but Im not exactly sure how it works. Figure ill cross that bridge if we ever get there lol.
From the website:
My thoughts are that I want to give my daughters a headstart/advantage, which I didnt get from my folks. I worked since I was 16 and all through college to make ends meet, and that helped me understand the value of a dollar and the importance of accountability. Basically Im gonna give them a Camry, and if theyre driven and ambitious enough to want the Benz, they can work to make up the difference. The experiences i gained working for everything i had was priceless and i dont want to deprive them of that.
With that said, if they need me to pay for 4 years at Princeton, Ill be able to do that too. Maybe my thoughts will change when its time (theyre only 6 and 2 now). Also, theres options for out of state and private schools but Im not exactly sure how it works. Figure ill cross that bridge if we ever get there lol.
From the website:
Mr.Guy
formerly timidtebow
- 23,944
- 8,608
- Joined
- Jul 3, 2013
I? thinking about investing in a Vanguard Target Requirement 2055 IRA Fund. Is anyone familiar with this fund?
- 3,949
- 1,197
- Joined
- Nov 16, 2001
In short, the same advantage as contributing to a RothIRA vs a non-tax advantaged account.
Interesting idea on the Real Estate. Hopefully he's in an area that favors landlords. Otherwise, someone can squat in the property for years without paying rent.
- 4,758
- 1,409
- Joined
- Nov 6, 2012
Oh okay makes sense.
Yeah thats always a risk, but he own 40+ units and has talked about evicting people before so I would assume he is prepared for that.
- 3,949
- 1,197
- Joined
- Nov 16, 2001
OK. Makes sense if he's well diversified. Also, I'm curious if he's buying the house within with a tax advantaged account. Otherwise, any gains he makes on the house would be taxed at the current capital gains rate in 18 years plus any local taxes too.
That's why I'm a fan of the ESA & 529 since they have a tax protection umbrella built in and stocks have a long history of beating the overall Real Estate market. But like I said before, it all depends what area he's buying in.
- 10,915
- 2,735
- Joined
- Apr 30, 2011
Question from a potential first-home buyer. Should I/how frequently do people dip into investments & retirement accounts to pay for a down payment on a home? I've got about $28k in my 401k, $45k in my Roth IRA & $25k in my brokerage account. My checking account I have enough for an emergency fund to keep me afloat for a bit, but I wouldn't feel comfortable using much of it to go into paying for a home.
Any resources you guys recommend reading?
Any resources you guys recommend reading?
Last edited:
- 3,949
- 1,197
- Joined
- Nov 16, 2001
I wouldn't dip into your retirement account for several reasons. First, there will likely be some penalties and taxes associated with the withdrawal, although I think you may be able to pull some from there for a DP. Consult a tax professional on that one though. Second, you're unplugging your investment from its long term growth for that purpose.
I would just take the money from your brokerage account and put that towards the down payment instead in addition to saving additional cash if you're looking to buy in the near term (<5 years).
Congrats on the EF. Definitely a must when owning a home.
- 681
- 402
- Joined
- Sep 29, 2013
How is Betterment as an investing account?
- 4,539
- 5,276
- Joined
- Jul 29, 2012
I took 10k out of my ROTH IRA for (one-time) costs for buying a home, no penalties or fees.
Here's an article of the specific guidelines from investopedia: http://www.investopedia.com/articles/personal-finance/110415/can-you-use-your-ira-buy-house.asp
- 5,853
- 1,020
- Joined
- Apr 30, 2005
Those are some healthy figures
based mod
How long have you been putting money into those accounts?
I wanna be like you when I grow up
based mod
How long have you been putting money into those accounts?
I wanna be like you when I grow up
- 10,915
- 2,735
- Joined
- Apr 30, 2011
Roth I've been maxing out since 2011. 401k has been going with 4% employer match for 5 years (included 403b when I was working for the university into this figure). Brokerage is just everything else after Roth & 401k contributions and bills are paid.
At my age, it's no where where it should be. I splurge too often. Need to make some cutbacks and do some serious saving for a place especially since I recently bought a new car (out of necessity, but could've done without the bells & whistles). The way things look now though, I'm not gonna be able to afford a house even if I really cheap it out in the next 5 years. Gonna have to look into condos/townhomes.
Save your money kids.
At my age, it's no where where it should be. I splurge too often. Need to make some cutbacks and do some serious saving for a place especially since I recently bought a new car (out of necessity, but could've done without the bells & whistles). The way things look now though, I'm not gonna be able to afford a house even if I really cheap it out in the next 5 years. Gonna have to look into condos/townhomes.
Save your money kids.
Last edited:
- 10,915
- 2,735
- Joined
- Apr 30, 2011
- 4,539
- 5,276
- Joined
- Jul 29, 2012
You can do FHA 3.5% down payment loan
- 4,758
- 1,409
- Joined
- Nov 6, 2012
You can also do 0%, 3%, 5%, 10% Conventional loans.
Yes it is ideal to put down 20% , but if you live in a HCOL area that is extremely unrealistic.
Unless your like my 24 yo friend and mommy and daddy are dropping 70K on your 20% DP lol .
I did a 3.5% FHA with a first time home buyers program don't regret it one bit. Plan on refinancing in the next 2 years to a conventional loan.
