$10K help

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tangelo
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Joined: Sun Aug 06, 2017 8:20 pm

$10K help

Post by tangelo » Sat Aug 12, 2017 12:12 am

Hey guys, I already have a roth, maxed out for the year. I have an extra $10K, and I'm wondering if investing it in a regular account via my online broker is a safe avenue? What would you recommend? I hate keeping it in my bank account, doing nothing. I don't need to touch it for another 16 years. What would you do with it? Thanks.

EDITED: No debt, no 401k, plenty of emergency money tucked away. Purely an extra $10 that I'm willing to roll the dice on, with ample risk if necessary. Thanks.
Last edited by tangelo on Sat Aug 12, 2017 4:56 pm, edited 1 time in total.

sport
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Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: $10K help

Post by sport » Sat Aug 12, 2017 12:39 am

You don't give enough information about yourself to answer properly. However, here is a short answer:
1. Start an emergency fund if you do not have one.
2. Pay off any high-interest consumer loans, such as credit card debt.
3. If you have money left after this, open a taxable account and invest it according to your investment plan in coordination with your IRA. In general, put stocks in the taxable account and bonds in the IRA. Your investment plan should include a stock/bond allocation appropriate for your need, ability, and willingness to take risk.
4. Keep all of your investments low cost.

JBTX
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Joined: Wed Jul 26, 2017 12:46 pm

Re: $10K help

Post by JBTX » Sat Aug 12, 2017 12:46 am

tangelo wrote:Hey guys, I already have a roth, maxed out for the year. I have an extra $10K, and I'm wondering if investing it in a regular account via my online broker is a safe avenue? What would you recommend? I hate keeping it in my bank account, doing nothing. I don't need to touch it for another 16 years. What would you do with it? Thanks.
Agree with everything sport said.

As to "safe" that is a relative term. I'd use a reputable well known low fee brokerage like vanguard fidelity or Schwab. Invest in index funds. Depending what you invest in the value will go up and down considerably so you have to be prepared for that but if you are parking it 16 years that shouldn't be a problem.

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ruralavalon
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Location: Illinois

Re: $10K help

Post by ruralavalon » Sat Aug 12, 2017 9:38 am

tangelo wrote:
Sat Aug 12, 2017 12:12 am
Hey guys, I already have a roth, maxed out for the year. I have an extra $10K, and I'm wondering if investing it in a regular account via my online broker is a safe avenue? What would you recommend? I hate keeping it in my bank account, doing nothing. I don't need to touch it for another 16 years. What would you do with it? Thanks.
More information is needed.

Do you have an emergency fund to cover 3-6 months of basic living expenses?

Do you have any debt? If so what types, amounts and interest rates?

Is there a work-based plan offered any your employer, such as a 401k, 403b, 457 or TSP? If so what are you contributing to that plan?

Please simply add this to your original post using the edit button.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

tangelo
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Joined: Sun Aug 06, 2017 8:20 pm

Re: $10K help

Post by tangelo » Sat Aug 12, 2017 4:57 pm

Thanks for all the help guys, I edited the post to add some other details.

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dratkinson
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Location: Centennial CO

Re: $10K help

Post by dratkinson » Sat Aug 12, 2017 5:40 pm

Given your new information, investing in a taxable account seems reasonable. What to choose?

Double duty use. For a CYA option, can extend your EF tiers by investing in bonds in taxable. If in the 25%+ fed tax bracket, use a muni bond fund. Most recommend VWITX (IT national muni; assuming you are a Vanguard client, or something equivalent if not) for a long-term holding.

I follow this advice and VWITX is:
--The last formal tier of my extended EFs (as a "daily accrual" fund, no IRS 6mo holding period requirement).
--Part of my bond allocation in taxable.
--Home project/new car fund.
--Dry powder.

And if you get some more money after this, then buy TSM to round out a 2-fund portfolio in taxable and call it good.



Welcome.
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

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ruralavalon
Posts: 11880
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: $10K help

Post by ruralavalon » Sun Aug 13, 2017 8:41 am

tangelo wrote:
Sat Aug 12, 2017 12:12 am
Hey guys, I already have a roth, maxed out for the year. I have an extra $10K, and I'm wondering if investing it in a regular account via my online broker is a safe avenue? What would you recommend? I hate keeping it in my bank account, doing nothing. I don't need to touch it for another 16 years. What would you do with it? Thanks.

EDITED: No debt, no 401k, plenty of emergency money tucked away. Purely an extra $10 that I'm willing to roll the dice on, with ample risk if necessary. Thanks.
I suggest a taxable account at a low cost provider like Vanguard, and investing in very tax-efficient stock index funds such as Vanguard Total Stock Market Index Fund or Vanguard Total International Stock Index Fund.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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