32 Years old here. New at investing

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Topic Author
pavenger
Posts: 1
Joined: Fri Jul 11, 2014 1:01 pm

32 Years old here. New at investing

Post by pavenger »

Hello all,

I currently have $47,000 split amongst a checking and savings account
-$25k in Barclays at 0.9%
-$23k in no fee checking at chase at 0%
-$40k in precious metals.. bought in 2004 at $12k

My income,
-Self employed software developer make average $60k net after expenses on average.

Here are my expenses
- $4700 sallie mae student loan at 2.08%
-$5300 private student loan at at 2.335
- $2800 chase cc at 0% until 2/2016

No car payment
No rent, current living in the guest house at my parents.
Singe
Not looking to buy a home yet

I am looking to get into an index fund pretty soon but I am holding out until later in the year after I come back from traveling.

Please share some advise to guide me on the right track.
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kenyan
Posts: 3015
Joined: Wed Jan 12, 2011 11:16 pm

Re: 32 Years old here. New at investing

Post by kenyan »

pavenger wrote:Hello all,

I currently have $47,000 split amongst a checking and savings account
-$25k in Barclays at 0.9%
-$23k in no fee checking at chase at 0%
-$40k in precious metals.. bought in 2004 at $12k

My income,
-Self employed software developer make average $60k net after expenses on average.

Here are my expenses
- $4700 sallie mae student loan at 2.08%
-$5300 private student loan at at 2.335
- $2800 chase cc at 0% until 2/2016

No car payment
No rent, current living in the guest house at my parents.
Singe
Not looking to buy a home yet

I am looking to get into an index fund pretty soon but I am holding out until later in the year after I come back from traveling.

Please share some advise to guide me on the right track.
Welcome to the forum!

You have provided a lot of the information, but many people prefer if you construct your post like this: http://www.bogleheads.org/forum/viewtop ... f=1&t=6212. That will give people additional information such as your tax rates, plans, emergency fund, etc.

You need to determine/tell us what your goals are. Are you planning on saving for a down payment? Contributing to your parents? Staying indefinitely while paying off debts and building up account balances? If you don't plan to save up for a house, you really should be plowing as much money as you can toward retirement, since your living expenses are minimal, and you don't need much of a cash emergency fund (unless you foresee potential long-term instability in your income).

Next, what you really should work on is getting some tax benefits out of your retirement investments. You're self-employed, so the IRS is extremely friendly to you. You can start a Solo 401k, contribute up to $17,500 as an employee, as well as up to 25% of your total compensation as an employer, up to an overall annual cap of $52,000. I'm not an expert on these, but I suggest reading up. The IRS documents are a great place to start, and the wiki here will also provide guidance. You can also save in an IRA.

Once you have decided what your goals are, and how you plan to save, then you can think about the instruments/investments to use. Here's where you should do some research. We can give you suggestions here, but it would be better if you spent at least a few hours reading a book. The Bogleheads' Guide to Investing is one great place to start, but there are plenty of other books - for recommendations see the wiki.
Retirement investing is a marathon.
User avatar
BL
Posts: 9874
Joined: Sun Mar 01, 2009 1:28 pm

Re: 32 Years old here. New at investing

Post by BL »

Vanguard has a page comparing small business plans:
https://investor.vanguard.com/what-we-o ... pare-plans

This company has almost all low-cost funds and many index funds.

Besides the Boglhead's book, take a look at
If You Can by William Bernstein
Amazon Kindle for 99 cents or free at:
https://dl.dropboxusercontent.com/u/290 ... %20Can.pdf

Bernstein has more complicated books but this one is a great starting 16-page booklet.
User avatar
ruralavalon
Posts: 26353
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: 32 Years old here. New at investing

Post by ruralavalon »

Welcome to the forum :) .
pavenger wrote:My income,
-Self employed software developer make average $60k net after expenses on average.
Since you are self-employed, the first thing to do is investigate and then open a tax-protected account for yourself, like:
"solo 401k";
"SEP"; or
"SIMPLE IRA".

You can set any of these up at Vanguard.
Vanguard, overview, small business plans.
Vanguard, table, comparison of plans.


The second thing to do is educate yourself a bit. You could start with these wiki articles: "Bogleheads® investment philosophy"; and "Lazy portfolios". And also try one or two general investing books from this list: "Suggested Reading".


Third, then decide on a desired asset allocation (stock/bond mix, wiki, on risk) and buy the mutual funds you want :) .

I hope that this helps.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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