27 & no debt: What else should I add to my "starter pack" portfolio?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
zayd13
Posts: 44
Joined: Sun May 31, 2015 2:17 pm

27 & no debt: What else should I add to my "starter pack" portfolio?

Post by zayd13 » Wed Jun 08, 2016 9:48 am

Hi all,

I'm 27 years old and over the last year I have been trying to build a financial foundation for my future. A year ago I paid off my student and car loans, and currently have a total of 0$ in liabilities. I'm an educator so my salary is modest, but because I do not have any debt I am able to save a good portion of my monthly salary. Currently my portfolio contains the following:

Retirement:
-Target Date Retirement Fund VFFVX. Opened in 2015 and maxed it out. Working on maxing it out again this year.
-Contribute 10% of gross monthly pay to OPERS, a public employees pension plan through my employer.

Other Investment(s):
-3k in VTSMX (index fund)

The above is all I have in regards to investments. I am here to see if you all have any suggestions on what else I should look at adding to my portfolio. Because I am so young I would like to take a moderate-to-aggressive approach to investment, and taper that off over the years. I've considered DRIPS and bonds, but wanted to see if you all had any suggestions for ways that I can start building a well-rounded portfolio based on what I have so far. Let's say that I can contribute $155/month to the additional investment(s). What would be the best way to divvy that up to start building my portfolio?

Lou354
Posts: 474
Joined: Sun Apr 03, 2016 10:51 pm

Re: 27 & no debt: What else should I add to my "starter pack" portfolio?

Post by Lou354 » Wed Jun 08, 2016 9:57 am

Congratulations on what you've accomplished so far. Part of a sound investment strategy is having an emergency fund so you don't have to dip into your investment portfolio. Also, if buying a house will be in your future up may want to start saving up for a down payment.
Last edited by Lou354 on Wed Jun 08, 2016 9:58 am, edited 1 time in total.

AnotherGuyInOhio
Posts: 28
Joined: Mon Jan 11, 2016 8:30 am

Re: 27 & no debt: What else should I add to my "starter pack" portfolio?

Post by AnotherGuyInOhio » Wed Jun 08, 2016 9:57 am

If you are looking for a tax deferred account, check out http://www.ohio457.org. It has a really good line-up of available funds, but since it is pre-tax just make sure you will be maxing out your Roth before the 457.

User avatar
ruralavalon
Posts: 11703
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: 27 & no debt: What else should I add to my "starter pack" portfolio?

Post by ruralavalon » Wed Jun 08, 2016 10:06 am

Congratulations on getting all of your student debt paid off :) .

Its great to see the debt eliminated, that you are starting young at investing, and that you are using low expense index funds.

zayd13 wrote:Hi all,

I'm 27 years old and over the last year I have been trying to build a financial foundation for my future. A year ago I paid off my student and car loans, and currently have a total of 0$ in liabilities. I'm an educator so my salary is modest, but because I do not have any debt I am able to save a good portion of my monthly salary. Currently my portfolio contains the following:

Retirement:
-Target Date Retirement Fund VFFVX. Opened in 2015 and maxed it out. Working on maxing it out again this year.
-Contribute 10% of gross monthly pay to OPERS, a public employees pension plan through my employer.

Other Investment(s):
-3k in VTSMX (index fund)

The above is all I have in regards to investments. I am here to see if you all have any suggestions on what else I should look at adding to my portfolio. Because I am so young I would like to take a moderate-to-aggressive approach to investment, and taper that off over the years. I've considered DRIPS and bonds, but wanted to see if you all had any suggestions for ways that I can start building a well-rounded portfolio based on what I have so far. Let's say that I can contribute $155/month to the additional investment(s). What would be the best way to divvy that up to start building my portfolio?

What is your tax bracket, both federal and state?

Do you have a desired asset allocation that you want to aim for?

What sort of retirement account (Roth IRA, traditional IRA, 401k, 403b, etc.) is Vanguard Target Retirement 2055 Fund (VFFVX) located in?

What sort of account is Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) located in?

Is there a work-based plan like a 401k, 403b, 457 that you can use? If so are you contributing to it, and how much? If so please list the funds offered. Is there an employer match offered?

Please amend your original post using the edit button, adding information using this format -- "Asking Portfolio Questions"
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

User avatar
BeBH65
Posts: 856
Joined: Sat Jul 04, 2015 7:28 am

Re: 27 & no debt: What else should I add to my "starter pack" portfolio?

Post by BeBH65 » Wed Jun 08, 2016 11:29 am

Hello Zayd,

You seem to be doing good.

An emergency fund and insurance are 2 items mentioned in the Bogleheads_personal_finance_planning_start-up_kit.
It would be best to have these in place before starting to invest for the long term.

Regards,
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

zayd13
Posts: 44
Joined: Sun May 31, 2015 2:17 pm

Re: 27 & no debt: What else should I add to my "starter pack" portfolio?

Post by zayd13 » Wed Jun 08, 2016 8:04 pm

ruralavalon wrote:Congratulations on getting all of your student debt paid off :) .

Its great to see the debt eliminated, that you are starting young at investing, and that you are using low expense index funds.

What is your tax bracket, both federal and state?

Do you have a desired asset allocation that you want to aim for?

What sort of retirement account (Roth IRA, traditional IRA, 401k, 403b, etc.) is Vanguard Target Retirement 2055 Fund (VFFVX) located in?

What sort of account is Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) located in?

Is there a work-based plan like a 401k, 403b, 457 that you can use? If so are you contributing to it, and how much? If so please list the funds offered. Is there an employer match offered?

Please amend your original post using the edit button, adding information using this format -- "Asking Portfolio Questions"




Thank you for your kind words and encouragement. Here are the answers to your questions:

"Do you have a desired asset allocation that you want to aim for?" - Well that's the thing: I'm trying to figure out what types of allocations would make the most sense for me. As I mentioned I am open to more risk given that I am still young, and definitely want some diversity however I can get it at this stage. What would you suggest would be a good allocation for someone like myself?

"What is your tax bracket, both federal and state? " - federal 2016: 25%, state 2016: 2.969%

"What sort of retirement account (Roth IRA, traditional IRA, 401k, 403b, etc.) is Vanguard Target Retirement 2055 Fund (VFFVX) located in?" - - Roth IRA.

"What sort of account is Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) located in?" - Taxable.

"Is there a work-based plan like a 401k, 403b, 457 that you can use? If so are you contributing to it, and how much? If so please list the funds offered. Is there an employer match offered?" - Unfortunately there is not a 401k option, but there is a 403b. I am not contributing to the 403b though. I have been contributing to my state pension plan (amassed about 8k to this point) and the Roth IRA I mentioned above. Do you think it's worth contributing to a 403b? What if I leave my employer soon?

zayd13
Posts: 44
Joined: Sun May 31, 2015 2:17 pm

Re: 27 & no debt: What else should I add to my "starter pack" portfolio?

Post by zayd13 » Wed Jun 08, 2016 8:07 pm

Lou354 wrote:Congratulations on what you've accomplished so far. Part of a sound investment strategy is having an emergency fund so you don't have to dip into your investment portfolio. Also, if buying a house will be in your future up may want to start saving up for a down payment.


Thank you so much for your encouragement - I really appreciate it. I do have a 4 month emergency fund and small amount put into a CD that I mentally committed to eventually being a portion of a down payment for a house in a few years (wanted somewhere to put my extra savings)

User avatar
ruralavalon
Posts: 11703
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: 27 & no debt: What else should I add to my "starter pack" portfolio?

Post by ruralavalon » Thu Jun 09, 2016 10:22 am

Regarding asset allocation, please see the wiki articles "risk tolerance" and "asset allocation". At age 27 I suggest something around 80% stocks and 20% bonds, and at least 20% of stocks in international stocks. But this is a very personal decision that you must make for yourself, based on your ability,willingness and need to take risk.

zayd13 wrote:Do you think it's worth contributing to a 403b? What if I leave my employer soon?

It's probably worth contributing to a 403b, depending. Is there an employer match offered in the 403b, and if so what is it? What plan providers can you choose from?What funds are offered in the 403b (fund names, tickers, & expense ratios)?

If you leave this employer you can just transfer it to a rollover IRA at a low expense provider like Vanguard.

AnotherGuyInOhio wrote:If you are looking for a tax deferred account, check out http://www.ohio457.org. It has a really good line-up of available funds, but since it is pre-tax just make sure you will be maxing out your Roth before the 457.

Are you eligible for this Ohio 457 plan? What funds are offered in it (fund names, tickers & expense ratios)?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

AnotherGuyInOhio
Posts: 28
Joined: Mon Jan 11, 2016 8:30 am

Re: 27 & no debt: What else should I add to my "starter pack" portfolio?

Post by AnotherGuyInOhio » Thu Jun 09, 2016 12:17 pm

ruralavalon wrote:
AnotherGuyInOhio wrote:If you are looking for a tax deferred account, check out http://www.ohio457.org. It has a really good line-up of available funds, but since it is pre-tax just make sure you will be maxing out your Roth before the 457.

Are you eligible for this Ohio 457 plan? What funds are offered in it (fund names, tickers & expense ratios)?


Here you go, link to a PDF: https://www.ohio457.org/tcm/ohio457/static/OhioIPR.pdf

Post Reply