About to be forced to exercise a variety of options/RSUs/stock as our company was acquired by a much larger one. I've spent some time looking at a 2-3 aggressive ETF portfolio. Any suggestions? These are the ETFs I have looked at VGT/VOO/VOOG/VTI/QQQM/VUG. This is a large amount of money for me; do I just split it into 3 and buy at once or cost average and put some into a Money Market (I will not need the funds, besides holding back some for taxes - which is another question)?
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Personal Finance Advice and Education! (1 Viewer)
- Thread starter No. 16
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Nugget
Footballguy
I'm a VTI and chill type of guy. It should be basically the US stock market. Add VXUS if you want any non-US exposure. VT makes a nice 1 stop global shop.
Math says lump sum in, but psychology of DCA makes sense as well.
A MMF seems like a good place for an upcoming tax bill - not sure if you will need to make quartely payments. You can just keep the fund in the same brokerage account wiht the ETFs.
Peggy
Footballguy
If you don't was to get too complicated VTI - VXUS - BND at percentages that correspond to your risk level. Bonds are going to turn around some day, they'll have to start cutting interest rates eventually.
skol asylum
Footballguy
Hey so I opened a high yield savings account (5.32% iirc) a little while back but didn't realize it didn't offer a way to direct deposit funds into from our paychecks. Id really like that option so I can set it and forget it instead of manually initiating moving money out of checking into that account. Anyone have an account with similar rates that allows for direct deposit? Preferably no balance minimums so I can get that rate from day 1 or no matter what the balance drops to.
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Nugget
Footballguy
Can you set up an auto transfer from checking each month? Seems easier than getting payroll and possibly a new account involved.
skol asylum
Footballguy
Possibly. I'll have to look into it.
I honestly don’t see the point of separate HYSAs. Seems like they have limits and limitations (like no direct deposit). I like using Fidelity where you can direct deposit, don’t need to do any transfers (anything in cash gets 5% and but stocks or whatever at any time. Way more convenient and barely noticeable difference in %. Heck, might work out better since the money is instantly earning 5% at DD instead of waiting for the monthly move.
Instinctive
Footballguy
GOOD LUCK!!!!!! We had a long and hard journey but it is so cool with the little guy here now. Would do it again in a heartbeat (and we sort of are...with a surrogate right now for our second - now THAT is pricy).
jm192
Footballguy
Thanks! Glad it worked out for you guys.
We did Egg retrieval Thursday. Rough day. 6 Eggs, only 2 were mature. Embryologist called yesterday. 2 of the 4 immature eggs matured, and they're fertilizing them. 1 of the 2 initially mature eggs fertilized. So we're up to 3 shots. Hopefully, we get good news Tuesday that all 3 are blasts.
Instinctive
Footballguy
We got news yesterday that our transfer with surrogate didn't take. 2 healthy embryos left. It can be very stressful, PM if you ever want to chat.
jm192
Footballguy
That stinks man. Hopefully one of those other 2 work out. And I appreciate it. May take you up on that some time.
The Z Machine
Footballguy
GLLLLLLL IVF brothers
Nugget
Footballguy
I've been thinking about cash accounts lately - how much is necessary for lumpy expenses and an emergency fund.
- Job loss/reduced income
- House expense
- Auto expense
- Medical bills
- Legal issues
- Family issues
- Aging issues
Currently, I am allocated in these 401K funds:
- American Europacific Growth R6 (Symbol: RERGX) ->>> 10% Allocation, YTD 3.67% Return
- Vanguard Extend Market Index FD (Symbol: VIEIX ->>> 20% Allocation, YTD 3.50% Return
- Vanguard Institutional Index (Symbol: VINIX ->>> 70% Allocation, 7.10% Return
These others are available to me.
Equity/Stocks:
- Aberdeen Emerg Mrkts Eq CT (Symbol: UOVST), YTD Return: 3.67%
- Columbia TR Contrarian INS 100 (Symbol: AMERT), Unknown Return
- DFA US Small cap PRTL CL Instl (Symbol: DFSTX), YTD Return: 1.13%
- Vanguard Total Intl CL Instl (Symbol: VTSNX), YTD Return 1.24%
- WTC NAM CIF II MID CA OPS SER (Symbol: WTMCT), Unknown return
Stable Value Funds:
- INVESCO Stable Value Trust (Symbol: INVES)
Allocation Funds:
- Vanguard Target Retirement (Symbol: VTR00)
- Vanguard Target Retiremt 2020 (Symbol: VTR20)
....These retirement funds good out to the year 2070 ...I would be a candidate for retirement in the next 20 years currently.
Any recommendations to make to improve my 401K allocation? I do 10% into my 401K (company matches the first 5%); looking to maximize/aggressive strategy; from my high level review, it looks like I'm doing well, but don't know enough about these other options available and if anyone who knows more would suggest any adjustments or allocation updates.
Thank you!
- American Europacific Growth R6 (Symbol: RERGX) ->>> 10% Allocation, YTD 3.67% Return
- Vanguard Extend Market Index FD (Symbol: VIEIX ->>> 20% Allocation, YTD 3.50% Return
- Vanguard Institutional Index (Symbol: VINIX ->>> 70% Allocation, 7.10% Return
These others are available to me.
Equity/Stocks:
- Aberdeen Emerg Mrkts Eq CT (Symbol: UOVST), YTD Return: 3.67%
- Columbia TR Contrarian INS 100 (Symbol: AMERT), Unknown Return
- DFA US Small cap PRTL CL Instl (Symbol: DFSTX), YTD Return: 1.13%
- Vanguard Total Intl CL Instl (Symbol: VTSNX), YTD Return 1.24%
- WTC NAM CIF II MID CA OPS SER (Symbol: WTMCT), Unknown return
Stable Value Funds:
- INVESCO Stable Value Trust (Symbol: INVES)
Allocation Funds:
- Vanguard Target Retirement (Symbol: VTR00)
- Vanguard Target Retiremt 2020 (Symbol: VTR20)
....These retirement funds good out to the year 2070 ...I would be a candidate for retirement in the next 20 years currently.
Any recommendations to make to improve my 401K allocation? I do 10% into my 401K (company matches the first 5%); looking to maximize/aggressive strategy; from my high level review, it looks like I'm doing well, but don't know enough about these other options available and if anyone who knows more would suggest any adjustments or allocation updates.
Thank you!
NutterButter
Footballguy
Something that I didn't know until today is that long term capital gains are taxed at 0% if you total taxable income is < 44k if single and < 89k if married. Just another thing to keep in mind when determining your retirement withdrawal strategy.
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-OZ-
Footballguy
What insurance do you have now? Presumably health, auto, home, umbrella, and life. It’s good to review coverage at least annually.
What coverage does your workplace cover for accidents / workman’s comp? Do you need professional insurance? (you probably have it if you need it).
We just carry enough cash / short term bonds to cover deductibles, any appliances which could reasonably break down, the next month’s routine expenses and any major planned expenses in the next 6 months. 6 months routine expenses is a better standard suggestion.
Snotbubbles
Footballguy
I have VOO. I also have ONEQ to track the NASDAQ.
So far I’ve allocated to VTI (majority), VOOG, and VGT as well as some individual stocks [biotechs I like (IOVA, AUTL, TGTX), Pfizer, Microsoft, Apple, Google]. Still have about 25% cash - in a Money Market getting 4.99%.
Nugget
Footballguy
Thanks. I probably need to look at what an umbrella product would cover and if I need a life insurance policy not connected to my employment.
I am leaning towards keeping a semester of tuition and 2 months expenses in a MMF, keep funding iBonds as an emergency fund/retirement bridge, and then additional cash into brokerage index fund. It seems inflation is going to be with us for a long time.
yak651
Footballguy
Wife’s aunt passed away and she is going to inherit approximately $400-450k. $30k is an inherited IRA the rest will be cash and proceeds from a non-qualified annuity. I told her have fun with $75-100k and invest the rest. Pretty conservative and since rates are decent probably just do some CD ladders. Any other advice for safe investments? Possibly also looking at second home in Tennessee or North Carolina, 2 areas we have liked to visit. Some background we are early 50s, wife was diagnosed with Multiple Myeloma in ‘21 so have been going through cancer treatments but besides fatigue she is doing pretty good. We have no debt and approximately $2M in investments , mostly in retirement vehicles not including our home. I would like to retire around 55 in 3 years, she’s currently on disability after teaching for 20 years as couldn’t be around kids with immune system problems along with the fatigue issues. That’s the reason I told her to try to enjoy at least some of this.
Sand
Footballguy
The 30k has to be drained in 10 years. You can do it all at 9.9 years or spread it out, just has to be to zero in 10 years. As far as investments CD ladders sound great, as do treasury ladders. Given your wife's health issues I'd be more worried about creating experiences than returns. Money is just a tool, after all.
Andrew74
Footballguy
Only thing I’d add is Treasuries are exempt from state taxes. Depending on your state, that could save some taxes vs CDs. Plus Treasuries are more liquid.
matttyl
Footballguy
Correct, unless aunt had already reached her RMD age - which (I think) means that you’ll need to at least take out those RMDs in years 1-9, and then final liquidation in year 10.
If you aren’t already, maximize each and every tax advantaged account you have access to including catch up contributions for each of you, and if needed, replenish cash flow from inheritance.
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Instinctive
Footballguy
What are the common things you all have done with respect to kids? Trying to keep it simple, with one newborn and hopefully the second successfully arriving in December. We've done the obvious like get him on my insurance (including dental, although opinions varied on whether to wait a year for that or do it now - ours is looooooow enough premium that I'd rather have it if somethign crazy happens int he first year).
We wrote a holographic will with some very simple provisions: who we want to be the kid's(') guardian(s), and where we want our assets to go. It would not be a complicated estate to probate at all.
We're thinking about 529s, but I've seen mixed reviews as to whether they are worth the trouble.
For an IRA, even one in a child's name, the child needs to have income, right? I'm thinking of ways to be creative - like if we had a small business or something could we stick his photo in a simple ad or two and then pay a going rate for child actors or something and put that money into an IRA for him, etc.
Basically an open: "Hey, FBGs with kids, how did you change anything you do in your personal finance because of them?"
We wrote a holographic will with some very simple provisions: who we want to be the kid's(') guardian(s), and where we want our assets to go. It would not be a complicated estate to probate at all.
We're thinking about 529s, but I've seen mixed reviews as to whether they are worth the trouble.
For an IRA, even one in a child's name, the child needs to have income, right? I'm thinking of ways to be creative - like if we had a small business or something could we stick his photo in a simple ad or two and then pay a going rate for child actors or something and put that money into an IRA for him, etc.
Basically an open: "Hey, FBGs with kids, how did you change anything you do in your personal finance because of them?"
Sand
Footballguy
I setup one 529 and put money in - 529s are good, but you want to underfund them so that nothing is left over if you can help it. It's a good automatic savings method, though.
IRA needs income, yes. You can always do a UTMA and then transfer monies over when they start working a bit as teens.
Desert_Power
Footballguy
Yeah, I was on the fence about the 529 but eventually opened one for my son after a few months. The key is that you have so much tax free time for it to grow. My son is just 2 so presumably what I have in there should about double twice by the time he would be in college.
Not sure if the current college system will still be around in 16 years (at some point these bloated institutions will be disrupted by tech) but there is a bit of flexibility with these.
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A 529 seems like a no-brainer especially if you are starting that young.
SFBayDuck
Footballguy
Also did a 529 and set up auto investing for it, and added to that when I had some extra. Now I'm at the point of making sure we get it all used for my Junior student. I barely drew down on it her first two years, but that's largely because she's gotten some grants and scholarships that I never know if she'll get each year, and I'm in tech sales so job security is always a potential issue. The good thing is they've added some more ways to use the funds the past few years. We have taken out some of the offered subsidized loans, some of which we've parked in a HYSA, and you can now use up to $10K to pay off loans. You can also roll over unused funds into a Roth.
Living in CA there were no state tax benefits to contributing. But now living in OR there is, so I've pulled out of the CA 529 each of the past couple of years and contributed to the OR to get that tax benefit. So be sure to check that in your state to see if any added benefit to the 529.
Instinctive
Footballguy
Texasssssssssssss lol
ConstruxBoy
Kate's Daddy
I believe the latest SECURE act allows you to move any leftover into a Roth IRA in the child's name. So the leftover easily can go to them, unless the idea is that you don't want to give them any leftover.
ETA: Saw Duck beat me to this.
Sand
Footballguy
I think the limit there is 35k, so if you overage by more than that you might be a bit stuck.
Funny enough I'm going to have to do this. Both of my kids got a UTMA from their grandfather. Somehow a number of years ago one ended up with NVDA in their pile and one didn't. Well now the balances are very skewed. It looks like my 529 for those two is a bit overfunded (one kid got a grant, so he was way cheaper than expected) and I'll be trying to true the unlucky one up with a Roth rollover to him. It should about even out unless NVDA keeps mooning (unlikely, IMO).
Instinctive
Footballguy
Yeah I'm still thinking on the 529...there is no state income tax in TX. There are no federal benefits. So basically if i was doing a 529 the purpose would be so that I could roll over $35k to a Roth IRA in the kid's name at some age in the future, right?
That math changes if were had to move to a state with an income tax, but, god-willing, that won't be something we're forced to do.
Runkle
Footballguy
Wow my dad had it easy lol. When I was born, he just bought 4 bonds that matured the 4 years I was supposed to go to college for $1000 each. Lucky me being born at the height of stagflation he got them locked in at about 18% interest so they were $30K-ish each when they were done.
SFBayDuck
Footballguy
Nice problem to have!
SFBayDuck
Footballguy
In that case, the real benefit is the tax-free growth. Which isn't insignificant, especially if you're starting when kids are young and you have 15+ years.
Runkle
Footballguy
IIRC there is a lot you can still do with a 529 besides tuition. For example, the kid can use it to pay rent for off-campus housing while they are "enrolled at least part-time" up to what the room & board would have been. Worst case even withdrawing with the penalty after putting as much as they can into an IRA is still a nice problem to have if it's grown so much it's overfunded.
Instinctive
Footballguy
Is it tax free though? All my investments already grow tax free from Texas' perspective.
or...ohhh the growth, as long as it is in the account, is free from federal taxation even though contributions and withdrawals aren't?
There are like zero good primers on this from early googling. very annoying. MUCH appreciated from y'all's experiences here.
matttyl
Footballguy
Just a quick tip - “most” group dental has a set rate for an “employee only”, another for “employee plus spouse”, another for “employee plus child/ren”, and finally “employee plus family.” Some health coverage is the same. Meaning if you’re already paying for one kid on a dental plan, there is typically no cost to adding more.
Instinctive
Footballguy
Yeah we have Self, Self + 1, and Family.
Most people would go from Self + 1 (married, no kids) to family. But since my wife also works at same firm, We both just have "Self" since self is fully covered but Self + 1 is like $24/mo (so for 3 years we may as well save the $500/yr).
When the second baby comes, we'll do a check on whether +1 to Family is more cost effective or moving my wife from Self to Self +1 is more cost effective.
Or maybe one of us has left the firm by then and it'll be moot! Haha.
SFBayDuck
Footballguy
Yes, the growth. So you put in $20K that you've already paid taxes on and it grows to $40K over 10 years, and you don't pay any cap gains taxes on the $20K growth (as long as funds are used for qualified educational expenses or one of the other uses we've been talking about in here).
Sand
Footballguy
My kids have no idea what a boon my father gave them with UTMAs. Those are going to have huge time to marinate and grow over the years. They are fortunate from that point of view, for sure.
As far as the 529 it is nice to have them covered. And the 529 didn't end up with a huge balance, so my kids really aren't chewing up huge education dollars. On the whole between those UTMAs, getting out of school with no debt, and probably some help with a house down payment I'll be able to give them as good a life assist as possible. In no way do I want a trust fund kid, so they'll get spot help and have to navigate waters from there.
Sand
Footballguy
Best case is to keep the leftovers for yourself, retire, then go enroll in cooking school in Italy for 6 months.
Not that I've been tempted by that thought...
I've been reading through the thread and had a couple of questions...
I'm 46 years old and have been a W2 contractor since I was 30. I never stayed with one firm long enough to start a 401k. I have a family of 5, so all of my money went to supporting them and not into any financial vehicles. I'm at a point now with a one off to college and another getting ready to go that my family expenses have gone down enough that I feel better about investing. Call me crazy (my wife does), but I always put the family before my retirement. Make sure they had the things I didn't have, then focus on me when I had the opportunity.
I don't plan on retiring early. I see myself working for another 20 years. No 401k plan to join, so looking at opening a Roth IRA. I know little about the market, less about picking the right stocks. I'm considering opening an online account and working my own investments. Or is it better to hire a guy to do that for me? I worked with a guy once in my 20s, but he was a car salesman type of led me into some bad investments. Lost a little then and never went back. Are firms still this way? Are the tools easier now to just jump in and go? I don't mind a little risk, but I'm more averse now than I was back then. Any insights, suggestions?
I'm 46 years old and have been a W2 contractor since I was 30. I never stayed with one firm long enough to start a 401k. I have a family of 5, so all of my money went to supporting them and not into any financial vehicles. I'm at a point now with a one off to college and another getting ready to go that my family expenses have gone down enough that I feel better about investing. Call me crazy (my wife does), but I always put the family before my retirement. Make sure they had the things I didn't have, then focus on me when I had the opportunity.
I don't plan on retiring early. I see myself working for another 20 years. No 401k plan to join, so looking at opening a Roth IRA. I know little about the market, less about picking the right stocks. I'm considering opening an online account and working my own investments. Or is it better to hire a guy to do that for me? I worked with a guy once in my 20s, but he was a car salesman type of led me into some bad investments. Lost a little then and never went back. Are firms still this way? Are the tools easier now to just jump in and go? I don't mind a little risk, but I'm more averse now than I was back then. Any insights, suggestions?
New Binky the Doormat
Footballguy
go with low cost funds at Fidelity or Vanguard - they will guide you as to which funds you should buy based on your goals and risk tolerance. Also, don't spend it and make sure any earnings are re-invested automatically.
do it now - time is not on your side, it's just the nature of compound interest
Nugget
Footballguy
I’d open both a brokerage account and a Roth IRA at either Fidelity, Schwab, or Vanguard. I’d try to contribute as close to $6500 as you can by April 15th in the Roth as that is the deadline for 2023 contributions. You have the remainder of the year to fund up to $7K for 2024 contributions. I’d use the brokerage account to start an emergency fund and then any additional savings past the Roth.
For Vanguard, VOO, VTI, or VT make nice low-cost ETFs that cover a lot of the market. VMFXX is a nice money market fund that I would use for an emergency fund. Bogleheads is a great resources for low cost, conservative investment advice.
My main accounts are at Schwab, but my kids have accounts at Fidelity and Vanguard. I think it depends on any bonus offers and how much you like the website/app.
Runkle
Footballguy
You don't need a guy. A Target-Date Retirement Fund, or just 3 index funds (domestic, international, and bonds in some mix) inside your Roth is fine. Once it hits a million, then ask if you need a guy.
DocHolliday
Footballguy
Such great advice. Investing can truly be that simple.
Peggy
Footballguy
@DadIssues
I'll peggy back what others have said. And put in a plug in for Fidelity. They have zero cost mutual funds. A 60-20-20 split is a good basis at your age. Do regular rebalancing.
FZROX 0.00% Total Stock Market - 60%
FZILX 0.00% International - 20%
FXNAX 0.025% Bond - 20%
The default cash sweep in the Roth should be SPAXX making 4.96% right now. Not sure what fund it is in a regular brokerage account.
If you do the Vanguard ETFs
VTI 0.03%
VXUS 0.08%
BND 0.03%
I'll peggy back what others have said. And put in a plug in for Fidelity. They have zero cost mutual funds. A 60-20-20 split is a good basis at your age. Do regular rebalancing.
FZROX 0.00% Total Stock Market - 60%
FZILX 0.00% International - 20%
FXNAX 0.025% Bond - 20%
The default cash sweep in the Roth should be SPAXX making 4.96% right now. Not sure what fund it is in a regular brokerage account.
If you do the Vanguard ETFs
VTI 0.03%
VXUS 0.08%
BND 0.03%
