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Message
Just opened my first Roth IRA, now what?
Posted on 7/11/19 at 10:37 am
Posted on 7/11/19 at 10:37 am
Put $6,000 in to hit the maximum contribution. I have 2-3 days before it clears to think about this, so I wanted to get the money board's advice. I'm a complete beginner. What funds do I pick? What about target date vs this "3 fund portfolio" I've heard mentioned? I'm through Vanguard, so what would the 3 funds be if I go that route? I'm 25, should I go 80-20 stocks-bonds or something else? What are admiral shares and can I/should I use those?
I know this is kind of rapid fire questions but I really appreciate any help I get.
I know this is kind of rapid fire questions but I really appreciate any help I get.
Posted on 7/11/19 at 10:38 am to Ingeniero
I'm commenting just for information, I plan on opening one in January once I graduate.
Posted on 7/11/19 at 10:44 am to Ingeniero
25 years old with just $6,000, I'd probably just stick it all in a target date fund. As you get older and add more money to it, I would diversify more.
ETA: Congrats on starting young, this was a great decision you made
ETA: Congrats on starting young, this was a great decision you made
This post was edited on 7/11/19 at 10:46 am
Posted on 7/11/19 at 11:03 am to Ingeniero
ETA:
I would probably start with total market fund. With only 6k, don’t bother with the 3 fund portfolio until you’re balance is much higher. Probably 4-5x the balance.
Congrats on getting started at your age.
I would probably start with total market fund. With only 6k, don’t bother with the 3 fund portfolio until you’re balance is much higher. Probably 4-5x the balance.
Congrats on getting started at your age.
This post was edited on 7/11/19 at 11:06 am
Posted on 7/11/19 at 11:04 am to Ingeniero
Put it in a total market fund. Admiral shares have a smaller fee. VTSAX used to be 10k min for the admiral. VTSMX was 3k or no min I believe. I thought someone mentioned a while back that there is no min now for admiral so look into VTSAX.
I would say since we are at all time highs to maybe go away from total S&P, but you're 25. Fire away
I would say since we are at all time highs to maybe go away from total S&P, but you're 25. Fire away
Posted on 7/11/19 at 11:08 am to Ingeniero
VTSAX
Posted on 7/11/19 at 11:27 am to Ingeniero
quote:
I'm through Vanguard
great choice.
put it all in 1 fund.
VFIAX or
VIGAX or
VTSAX
forget a target date fund. i have posted many times here why not to use one.
Posted on 7/11/19 at 11:41 am to Ingeniero
I would suggest a robo managed smart IRA like Schwab where you pick your risk comfort level and then it handles your portfolio for you. No fees for such a service either. No stress for you.
This would also be a lower cost option than investing in a vanguard fund.
This would also be a lower cost option than investing in a vanguard fund.
This post was edited on 7/11/19 at 11:43 am
Posted on 7/11/19 at 11:47 am to Ingeniero
Good answers here. I echo,
1) No need for three funds yet
2) forget the target date nonsense
3) Go with a total stock market mutual fund
Great job!
1) No need for three funds yet
2) forget the target date nonsense
3) Go with a total stock market mutual fund
Great job!
Posted on 7/11/19 at 3:40 pm to Ingeniero
I am in the same boat as you. 25yo and putting funds into both my company matched 403(b) and I opened a Roth in February, no debt besides a mortgage and thanks to a recent pay bump I am working on getting a 529 set up for future lil' crawfish. A few months ago this was posted on a MB thread so I figured I would share. I have been rearranging things to try and fall in line with this. I'll see you in the Keys when we retire at 58
This post was edited on 7/11/19 at 3:46 pm
Posted on 7/11/19 at 4:33 pm to Ingeniero
Won’t be a popular opinion, but I would not do anything right now. All time high markets and don’t want to get into politics, but there are some important events in the near future. I’d spend some time researching stocks, learning how to use the platform of whoever you set your account up with.
Pay attention to the news and watch how individual stocks react to bad news (while investing in stocks that were oversold because of bad news is a small overall percentage of my investments, it is something I’ve been pretty successful with). I have a few exceptions where I won’t buy regardless (like in the airline industry), but watching Boeing over the last several months has been quiet interesting. I’m not saying it’s a bad buy, but I cut out airlines completely after PanAm. Still pretty enticing at times.
Pay attention to the news and watch how individual stocks react to bad news (while investing in stocks that were oversold because of bad news is a small overall percentage of my investments, it is something I’ve been pretty successful with). I have a few exceptions where I won’t buy regardless (like in the airline industry), but watching Boeing over the last several months has been quiet interesting. I’m not saying it’s a bad buy, but I cut out airlines completely after PanAm. Still pretty enticing at times.
Posted on 7/11/19 at 5:07 pm to Ingeniero
Step 1: Stack cash
Step 2: Check stack
Step 3: If enough, live happily ever after
Step 4: If not, go back to step 1
Step 2: Check stack
Step 3: If enough, live happily ever after
Step 4: If not, go back to step 1
Posted on 7/11/19 at 5:44 pm to Ingeniero
Congrats on starting early, I just showed my kids 11 and 14 the power of starting early.
I started at 25 as well and just kept putting mine in several funds (Windsor 2 cap, opportunities ) and such. One thing I have learned here and I wish I knew before is VTSAX!! Knowing what I know now I would have just went all in on it and let it ride don’t get me wrong my other strategy has done ok but I think I would have been better off with the lower cost of that one fund.
That being said just put it in and don’t get scared and don’t even think of bonds until your 5 yrs out from retirement. That’s my take fwiw
I started at 25 as well and just kept putting mine in several funds (Windsor 2 cap, opportunities ) and such. One thing I have learned here and I wish I knew before is VTSAX!! Knowing what I know now I would have just went all in on it and let it ride don’t get me wrong my other strategy has done ok but I think I would have been better off with the lower cost of that one fund.
That being said just put it in and don’t get scared and don’t even think of bonds until your 5 yrs out from retirement. That’s my take fwiw
Posted on 7/11/19 at 7:33 pm to Ingeniero
Congrats on greatly improving your financial status in 30 years....
Only thing I do differently is spread it out over the year vs lump sum.
Only thing I do differently is spread it out over the year vs lump sum.
Posted on 7/13/19 at 8:29 am to Ingeniero
Where did you open your Roth??
Posted on 7/13/19 at 1:12 pm to Ingeniero
I did a Roth in 1998. Bought some amazon in it. Didn’t qualify for a Roth since then. Best thing I ever did as it’s still there and worth $90k now. Pick a great stock or two (Costco/Walmart/FB/AAPL) or a S&P 500 fund and forget about it.
Posted on 7/13/19 at 3:26 pm to Ingeniero
Vanguard target date funds are perfectly fine for most people. They are well balanced and have low fees.
That’s not to say, that couldn’t earn more. You could. If you don’t know much right now (or don’t feel like researching too much), they are fine options.
That’s not to say, that couldn’t earn more. You could. If you don’t know much right now (or don’t feel like researching too much), they are fine options.
This post was edited on 7/13/19 at 3:28 pm
Posted on 7/14/19 at 3:27 pm to Ingeniero
quote:
I know this is kind of rapid fire questions but I really appreciate any help I get.
First I would peruse this:
VGD successful investing
I'm a contrarian, growth can't lead the markets forever. Look at IJS, or VBR, VTV, VYM, or VYMI. Or, if you think the market is likely to contract the Vanguard global minimum volatility fund, VMVFX. VMVFX would get you more to mid-cap exposure and global equity exposure. Just don't become Mikey P, Jr and invest/sell on hunches or a bad case of the "feels".
Posted on 7/16/19 at 9:48 am to Ingeniero
Just want to tack onto this question as i am in a VERY similar position.
I just put 6000 in to max my contribution but i also want to start auto-investing.
However, I'm confused as a i cant contribute monthly if already hit the max. Do i just need to set a reminder to start auto investments come January 1?
I just put 6000 in to max my contribution but i also want to start auto-investing.
However, I'm confused as a i cant contribute monthly if already hit the max. Do i just need to set a reminder to start auto investments come January 1?
Posted on 7/16/19 at 10:32 pm to Ingeniero
You’ll be fine.
Don’t overthink it.
In general, consider a small cap index, a large cap index, an international equity fund, and a real estate fund.
I don’t think you have to have a bond fund when you are young.
Don’t overthink it.
In general, consider a small cap index, a large cap index, an international equity fund, and a real estate fund.
I don’t think you have to have a bond fund when you are young.
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