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Started By
Message
How to invest $1,000 a month long term
Posted on 1/9/18 at 4:47 pm
Posted on 1/9/18 at 4:47 pm
For ease of #’s let’s assume i have $1,000 a month to invest.
Goal of this money is long term wealth building and college fund for 2 young kids. It’s separate from 401k which is currently at 4% & company match. Emergency fund it already in good shape.
I am just genuinely trying to best utilize this $ and would like to know some ideas on how to allocate the $. 529’s, mutual funds etc.
If any other relevant info is needed i will add to this post.
I’m Thinking something like this.
$600 Moderately aggressive mutual funds
$300 529 plan
$100 Stock investing
Or should i increase 401k contributions and have less $ to invest otherwise?
Goal of this money is long term wealth building and college fund for 2 young kids. It’s separate from 401k which is currently at 4% & company match. Emergency fund it already in good shape.
I am just genuinely trying to best utilize this $ and would like to know some ideas on how to allocate the $. 529’s, mutual funds etc.
If any other relevant info is needed i will add to this post.
I’m Thinking something like this.
$600 Moderately aggressive mutual funds
$300 529 plan
$100 Stock investing
Or should i increase 401k contributions and have less $ to invest otherwise?
This post was edited on 1/9/18 at 5:09 pm
8
Posted on 1/9/18 at 5:19 pm to cajuntiger26
Ethereum Crypto Currency
Posted on 1/9/18 at 5:25 pm to cajuntiger26
I don’t know much about the college fund, but I would think you’d want to put more in your 401k, since it’s pre tax money you are putting in. If you get money now and put it in a fund, you will get income taxed on it now, and taxed again down the road when you sell.
Posted on 1/9/18 at 6:01 pm to cajuntiger26
If it was me, and I was only currently contributing 4% to my 401k, I would most definitely max that out first. After that, maybe whatever is left over towards your kid's 529.
Posted on 1/9/18 at 6:06 pm to AnonymousTiger
It would be nice to up his 401k but he can't access that money for his kids, unless he hits 60 before they hit college.
OP could put aside what he thinks he needs in the 529 (assuming he's funding his ROTH).
If there is some remaining, then bump 401k or ROTH, whatever your preference is.
OP could put aside what he thinks he needs in the 529 (assuming he's funding his ROTH).
If there is some remaining, then bump 401k or ROTH, whatever your preference is.
This post was edited on 1/9/18 at 7:25 pm
Posted on 1/9/18 at 6:06 pm to cajuntiger26
$300 month is mutual fund
$200 month in 529
$200 month in stocks
$100 month in crypto(not a joke)
Increase 401k
$200 month in 529
$200 month in stocks
$100 month in crypto(not a joke)
Increase 401k
Posted on 1/9/18 at 6:09 pm to cajuntiger26
$1,000 a month into a Roth IRA for 5.5 months until it hits $5,500 for the year and then $1,000 a month into your wife’s Roth IRA for 5.5 months until that is at $5,500. The last month contribute the $1,000 to a 529 for the kid.
The fund you should use for the Roth IRA’s are VTSAX. The 529 depends on kids age.
The fund you should use for the Roth IRA’s are VTSAX. The 529 depends on kids age.
Posted on 1/9/18 at 6:48 pm to Teddy Ruxpin
(no message)
This post was edited on 2/12/25 at 11:34 am
Posted on 1/9/18 at 7:07 pm to OleWarSkuleAlum
Hijack
With vanguard is it easy to change the fund in your Roth IRA? Think I did mine wrong when I set it up
With vanguard is it easy to change the fund in your Roth IRA? Think I did mine wrong when I set it up
Posted on 1/9/18 at 7:14 pm to blzr
Yes
Posted on 1/9/18 at 7:15 pm to lnomm34
quote:
My retirement savings trumps kids college savings
Personal choice. I can only answer questions how they are framed.
We don't even know if he funds his ROTH, which would be the preferable vehicle ahead of the 529 since it is more flexible.
As for 401k vs ROTH, that can also be personal preference though I prefer the tax savings now.
This post was edited on 1/9/18 at 7:16 pm
Posted on 1/9/18 at 9:45 pm to blzr
quote:
With vanguard is it easy to change the fund in your Roth IRA? Think I did mine wrong when I set it up
Yes very very easy
Posted on 1/10/18 at 9:32 am to cajuntiger26
It would be unwise to invest any money that will be used after you are 60 in any account but a retirement account. Use a 401k until it is maxed or a Roth if you want. A Roth you can always pull out the principle you put in with absolutely no penalty.
That's why I always laugh at people that don't have a Roth but have a huge emergency fund. Worst case put your emergency fund in cash in a Roth.
College fund is all up to you OP. Most people say to max your 401k before contributing to a 529, but that's not really doable for most people. You need to figure out what you will pay for for your kids college, what you can afford, and what it will cost. There's plenty of people that stop their 401k's while kids are in college because they can't afford both. That doesn't make sense either.
That's why I always laugh at people that don't have a Roth but have a huge emergency fund. Worst case put your emergency fund in cash in a Roth.
College fund is all up to you OP. Most people say to max your 401k before contributing to a 529, but that's not really doable for most people. You need to figure out what you will pay for for your kids college, what you can afford, and what it will cost. There's plenty of people that stop their 401k's while kids are in college because they can't afford both. That doesn't make sense either.
Posted on 1/10/18 at 9:43 am to cajuntiger26
What's "long term" to you? No advice will make any sort of sense without that.
You are getting the full match on your 401K, correct? If so, I would go with your own IRA/Mutual Funds outside of the 401K space, unless you have a compelling reason not to (like I do). Obviously, getting the full match is a no-brainer.
$1000 a month is a lot of money. Real estate carries a lot of risk and expenses, but is another great way to build wealth long-term, particularly with a 15 to 20 year window (or longer). It's certainly easy to leverage money in real estate than it is in equities, for example.
Plus, there are advantages to running a real estate investment business on the side (as opposed to passive investing in stock, bonds, "instruments", so forth) - it's a "real" business, with tax advantages, the potential to structure your investments in a professional way.
You are getting the full match on your 401K, correct? If so, I would go with your own IRA/Mutual Funds outside of the 401K space, unless you have a compelling reason not to (like I do). Obviously, getting the full match is a no-brainer.
$1000 a month is a lot of money. Real estate carries a lot of risk and expenses, but is another great way to build wealth long-term, particularly with a 15 to 20 year window (or longer). It's certainly easy to leverage money in real estate than it is in equities, for example.
Plus, there are advantages to running a real estate investment business on the side (as opposed to passive investing in stock, bonds, "instruments", so forth) - it's a "real" business, with tax advantages, the potential to structure your investments in a professional way.
Posted on 1/10/18 at 9:45 am to lnomm34
quote:
My retirement savings trumps kids college savings.
Right - when you have the time available in the market, you're usually struggling to get by. If anything, it's better to plan for grandchildren's college, because by that time, you'll have more disposable and your retirement picture will start to congeal.
A generation skipping education plan is probably smarter for most working Americans, although obviously if you're flush, you should do it for your kids as well.
Posted on 1/10/18 at 10:41 am to cajuntiger26
Given the fact that you can contribute $5.5K in a Roth IRA and upto $18K in a employer sponsored salary deferral plan (401k), you should not be looking anywhere else before you max out this for yourself (and your partner if you are a couple). Look at the tax savings as added "ROI" in addition to the growth of your funds. Tough to beat any other way.
Add another $3,450x2 if you have an HSA. If you don't; look into it and see if it works for you.
Once you have maxed your IRA, 401(k) and HSA (if applicable) for both you + partner, that is when you can look to get creative.
Add another $3,450x2 if you have an HSA. If you don't; look into it and see if it works for you.
Once you have maxed your IRA, 401(k) and HSA (if applicable) for both you + partner, that is when you can look to get creative.
This post was edited on 1/10/18 at 10:48 am
Posted on 1/23/18 at 12:22 pm to AmeriKop45
So after reading most of the comments here and doing more research i have settled on the following.
Increasing my mortgage payments by $300 to get me on track to pay it off in a 15 year term.
Will increase 401k contributions to account for approximately $600.
Remaining $100 will go into the 529 plan.
Increasing my mortgage payments by $300 to get me on track to pay it off in a 15 year term.
Will increase 401k contributions to account for approximately $600.
Remaining $100 will go into the 529 plan.
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