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Investment Advice For Recent LSU Graduate
Posted on 12/23/17 at 10:46 am
Posted on 12/23/17 at 10:46 am
My son graduated from LSU recently and I'm seeking some guidance from the Money Board on giving him investment advise.
A little background: He is 23 and is a Horticulture major and has a job with a landscaper. I've talked to him about building an emergency fund. He has this. I have talked to him about the importance of staying out of debt. He has none. I have talked to him about how important it is to pay himself first by being disciplined about saving some from each paycheck. He does this.
He has around $25,000 in his checking account that pays minimal interest. I have been talking to him about buying a few Vanguard mutual funds, but he is a little reluctant about buying in at all time highs in the market. Given his investment timeframe, he could buy in now or dollar cost average?
What advice would you give him if you were me to help him build a nest egg? What funds would you suggest for the long haul (Buy & Hold)? I appreciate it!
A little background: He is 23 and is a Horticulture major and has a job with a landscaper. I've talked to him about building an emergency fund. He has this. I have talked to him about the importance of staying out of debt. He has none. I have talked to him about how important it is to pay himself first by being disciplined about saving some from each paycheck. He does this.
He has around $25,000 in his checking account that pays minimal interest. I have been talking to him about buying a few Vanguard mutual funds, but he is a little reluctant about buying in at all time highs in the market. Given his investment timeframe, he could buy in now or dollar cost average?
What advice would you give him if you were me to help him build a nest egg? What funds would you suggest for the long haul (Buy & Hold)? I appreciate it!
9
Posted on 12/23/17 at 10:57 am to Clete Purcel
Slowly start a portfolio using 3 bucket system
1. Tax now - Mutual funds
2. Tax later - tax deferred ( 401k, IRA )
3. Tax never - Roth or WHole life ( WL designed around max accumulation not death benefit, yes there is a major difference. I suggest New York life policy. Great if you don't qualify for Roth ) I'd suggest a Nyl rep to help with all 3. Unless your just wanting to go self directed.
1. Tax now - Mutual funds
2. Tax later - tax deferred ( 401k, IRA )
3. Tax never - Roth or WHole life ( WL designed around max accumulation not death benefit, yes there is a major difference. I suggest New York life policy. Great if you don't qualify for Roth ) I'd suggest a Nyl rep to help with all 3. Unless your just wanting to go self directed.
This post was edited on 12/23/17 at 11:06 am
Posted on 12/23/17 at 11:00 am to Clete Purcel
While I appreciate his concern about buying at an all time high, you don't get lost years of Roth contributions back. He needs to max out his $5,500 now, and while I think it's a really bad idea, but if it's the only way he'll do it, he can stick it in a bond fund, or hell, money market fund.
But every year he lets pass without making that contribution will cost him tens of thousands of dollars in future tax free growth.
But every year he lets pass without making that contribution will cost him tens of thousands of dollars in future tax free growth.
Posted on 12/23/17 at 11:25 am to Clete Purcel
quote:
He has around $25,000 in his checking account that pays minimal interest. I have been talking to him about buying a few Vanguard mutual funds, but he is a little reluctant about buying in at all time highs in the market. Given his investment timeframe, he could buy in now or dollar cost average?
The way I see this is if those stocks are worth less in 30 some odd years when he is retirement age we are going to have bigger problems to deal with.
Posted on 12/23/17 at 11:45 am to Clete Purcel
quote:The Graduate, you say??
Investment Advice For Recent LSU Graduate
Posted on 12/23/17 at 12:25 pm to Joshjrn
quote:
While I appreciate his concern about buying at an all time high, you don't get lost years of Roth contributions back. He needs to max out his $5,500 now, and while I think it's a really bad idea, but if it's the only way he'll do it, he can stick it in a bond fund, or hell, money market fund.
Agree 100%. Fund 2017 ASAP (ST bond or money market) and then I'd dollar cost average every pay check for 2018 in a Vanguard Index Fund (S&P 500 or Total Stock Market). During the year he can move the 2017 contribution from the ST Bond fund to an Index fund as he feels more comfortable.
Looks like he is off to great start and undoubtedly at least in part because of your good advice.
Posted on 12/23/17 at 12:27 pm to Clete Purcel
At 23 years old in 2018?
95% crypto
Inb4 Dow Jones enthusiasts with thier 10% gains on a good year
95% crypto
Inb4 Dow Jones enthusiasts with thier 10% gains on a good year
Posted on 12/23/17 at 12:52 pm to rocket31
You forgot to mention AUPH
Posted on 12/23/17 at 1:41 pm to Paul Allen
quote:
AUPH
Posted on 12/23/17 at 2:16 pm to Paul Allen
One word:
Iraqi Dinar
Iraqi Dinar
Posted on 12/23/17 at 2:20 pm to Clete Purcel
quote:
Horticulture major
do you really need a 4 year degree to landscape?
Posted on 12/23/17 at 2:20 pm to Clete Purcel
While great advice has been given, I’ll give my simplified answer:
Steady $200 or more per month auto drafted into a Roth IRA is a must. Invest in a wealth diversified fund.
Anything else is extra.
Steady $200 or more per month auto drafted into a Roth IRA is a must. Invest in a wealth diversified fund.
Anything else is extra.
Posted on 12/23/17 at 5:24 pm to bayoubengals88
Thank you everyone for the input. You've given me some good things to think about and consider. We'll have a discussion and get his money invested and working for him as soon as possible.
Posted on 12/23/17 at 7:09 pm to Clete Purcel
Dollar cost averaging is fine.
So is lump sum investing as long as you understand market risk.
Sounds like he may want to dollar cost average so he does not get spooked out of market.
Time is his partner in investing. He should do well over 40 years in a low cost mutual fund.
So is lump sum investing as long as you understand market risk.
Sounds like he may want to dollar cost average so he does not get spooked out of market.
Time is his partner in investing. He should do well over 40 years in a low cost mutual fund.
Posted on 12/23/17 at 9:17 pm to bstew3006
quote:hmmmmmm may. I wonder why?
. I suggest New York life policy.
Posted on 12/23/17 at 9:41 pm to La Place Mike
quote:
hmmmmmm may. I wonder why?
Sure, that's where I have a lot of my retirement. You do know they do a hell of a lot more than life insurance, right? They have the strongest dividend. I don't qualify for a Roth. Therefore, I'm using there policy as a tax shelter. FYI, I'm not an agent there as you were implying.
This post was edited on 12/23/17 at 9:49 pm
Posted on 12/24/17 at 10:00 am to bstew3006
quote:Are you sure about that?
They have the strongest dividend.
quote:Are you sure about that?
I'm not an agent there as you were implying.
Posted on 12/24/17 at 1:52 pm to La Place Mike
Strongest dividend for the product, 6.25%
Yes, last time I checked I wasn't an agent for them. Im in the P&C business.
Did my support and recommendation bother you? What's your recommendation and why or you just a troll?
Yes, last time I checked I wasn't an agent for them. Im in the P&C business.
Did my support and recommendation bother you? What's your recommendation and why or you just a troll?
This post was edited on 12/24/17 at 2:11 pm
Posted on 12/26/17 at 4:33 pm to bstew3006
quote:what product? Mass Mutual has paid a higher dividend for the past 11years. Guardian my have also paid a higher dividend. That's just off the top of my head.
Strongest dividend for the product, 6.25%
The problem I had with your post was that it was essentially a NYL AD
Posted on 12/26/17 at 4:48 pm to La Place Mike
Wrong. Lol
Look at the payout on the dividend. Mass is a great company but has either decreased or held steady the past 10 years. Nyl is paying out 1.77 billion which leads the industry as of 2016 to mass of 1.6b and guardians 5.8% on 850 million. Haven't looked for 2017. Sure you're not a mass rep???
Lol, it might have sounded like an ad, I get it. I've been in the industry a long time and really support that model. It's my model and has really paid off for me.
Look at the payout on the dividend. Mass is a great company but has either decreased or held steady the past 10 years. Nyl is paying out 1.77 billion which leads the industry as of 2016 to mass of 1.6b and guardians 5.8% on 850 million. Haven't looked for 2017. Sure you're not a mass rep???
Lol, it might have sounded like an ad, I get it. I've been in the industry a long time and really support that model. It's my model and has really paid off for me.
This post was edited on 12/26/17 at 5:13 pm
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