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Started By
Message
Need some advice on what to do with a small amount of money in a Schwab account
Posted on 4/20/17 at 10:09 am
Posted on 4/20/17 at 10:09 am
Background: 31 years old, single for another year or so maybe, just purchased a home in December. I max the % my employer will match and contribute the max per month to a Vanguard Target Date fund.
So I recently realized that I have a small amount of money with Charles Schwab. When I was a little kid my parents put some money into stocks for me into Coke and Honeywell (not sure why) that I have honestly never even really thought about. I just checked the stats today and have the following:
Coca Cola- 19 shares, $843 (D rating)
Honeywell- 10 shares, $1,296 (C rating)
Mutual Funds- Schwab S&P 500 Index Fund (SWPPX)- 26 shares, $969 (Morningstar 4* rating)
Grand total of everything here is $3,151 so we're not dealing with much. I guess I'm pretty clueless on what do to since I've never dabbled in stocks, I like the VG target date approach of just throwing money every month into a "set it and forget it" situation.
My ultimate question is what should I do from here to be the most beneficial in the long run? Should sell all of the individual stocks (coke/honeywell) and put them into an index fund? I've never dealt with this kind of situation before, can I simply "transfer" that money or do I have to literally sell them all first then reinvest the money? And similar to what I do with VG, do I have the option to throw some money into it monthly or is this more of a buy/sell/trade only kind of deal?
Again I'm totally clueless on all this, I just think it's pointless to have that little amount of money just sitting there when I could potentially be using the next 20 years to make it grow towards retirement.
So I recently realized that I have a small amount of money with Charles Schwab. When I was a little kid my parents put some money into stocks for me into Coke and Honeywell (not sure why) that I have honestly never even really thought about. I just checked the stats today and have the following:
Coca Cola- 19 shares, $843 (D rating)
Honeywell- 10 shares, $1,296 (C rating)
Mutual Funds- Schwab S&P 500 Index Fund (SWPPX)- 26 shares, $969 (Morningstar 4* rating)
Grand total of everything here is $3,151 so we're not dealing with much. I guess I'm pretty clueless on what do to since I've never dabbled in stocks, I like the VG target date approach of just throwing money every month into a "set it and forget it" situation.
My ultimate question is what should I do from here to be the most beneficial in the long run? Should sell all of the individual stocks (coke/honeywell) and put them into an index fund? I've never dealt with this kind of situation before, can I simply "transfer" that money or do I have to literally sell them all first then reinvest the money? And similar to what I do with VG, do I have the option to throw some money into it monthly or is this more of a buy/sell/trade only kind of deal?
Again I'm totally clueless on all this, I just think it's pointless to have that little amount of money just sitting there when I could potentially be using the next 20 years to make it grow towards retirement.
3
Posted on 4/20/17 at 2:41 pm to WG_Dawg
If it's in a normal investment account I'd open a Roth and transfer it all into that.
It's just like a bank account but you can buy and sell equities as investments. A Roth account through schwab is the exact same as an investment account except that any earnings is not taxed. You'll probably have to sell them and transfer just the money into a Roth, but I'm not positive.
It's just like a bank account but you can buy and sell equities as investments. A Roth account through schwab is the exact same as an investment account except that any earnings is not taxed. You'll probably have to sell them and transfer just the money into a Roth, but I'm not positive.
This post was edited on 4/20/17 at 2:44 pm
Posted on 4/20/17 at 2:54 pm to WG_Dawg
I would look into opening a Roth IRA and put the money in an ETF with low management fees (SPY, ITOT, etc) and forget about it. Could also consider putting the money into a Value Fund with low management fees too. Schwab has SCHV.
Either way, I would stay away from high management fee funds or single stocks. Just my view.
You could also pay down principle on your new home mortgage if your rates are high or if you are paying PMI with a goal of eliminating it.
You will also have a tax obligation if you sell what you have and it has a gain. Your account statement will show your cost basis in your investments so you will be able to determine the tax liability.
Just some thoughts off the top of my head ...
Either way, I would stay away from high management fee funds or single stocks. Just my view.
You could also pay down principle on your new home mortgage if your rates are high or if you are paying PMI with a goal of eliminating it.
You will also have a tax obligation if you sell what you have and it has a gain. Your account statement will show your cost basis in your investments so you will be able to determine the tax liability.
Just some thoughts off the top of my head ...
Posted on 4/20/17 at 3:01 pm to WG_Dawg
How much do you have in your other accounts?
That matters, as exposure to a few stocks like this isn't a bad idea and by no means are these "bad" investments. And the transaction fees might hurt a bit if you were to liquidate. Plus Capgains.
That matters, as exposure to a few stocks like this isn't a bad idea and by no means are these "bad" investments. And the transaction fees might hurt a bit if you were to liquidate. Plus Capgains.
This post was edited on 4/20/17 at 3:02 pm
Posted on 4/21/17 at 8:15 am to baldona
quote:
If it's in a normal investment account I'd open a Roth and transfer it all into that.
It's just like a bank account but you can buy and sell equities as investments. A Roth account through schwab is the exact same as an investment account except that any earnings is not taxed. You'll probably have to sell them and transfer just the money into a Roth, but I'm not positive.
So basically, just go into the CS website, open a Roth account and transfer the small I have into it? Any particular type of fund you'd suggest?
Posted on 4/21/17 at 8:16 am to Cajun Cricket
quote:
I would look into opening a Roth IRA and put the money in an ETF with low management fees (SPY, ITOT, etc) and forget about it. Could also consider putting the money into a Value Fund with low management fees too. Schwab has SCHV.
So open SCHV through Schwab, transfer what I have in there, then I can still contribute to it monthly?
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