Age 25 - New to Investing, Looking for Advice

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muney3
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Joined: Mon Feb 12, 2018 8:40 pm

Age 25 - New to Investing, Looking for Advice

Post by muney3 » Mon Feb 12, 2018 9:12 pm

Hello guys,

New to the site, been reading "The Bogglehead's Guide to Investing" for a bit now and I am intrigued, but generally just looking for any advice as where to get started.

I am a 25 year old engineer thats just looking for any personalized advice. My salary is 85k, I have about $10,000 worth of Series EE Savings bonds that I had been given as a baby (about half of which have reached maturity.) My company offers a 401(k) matching 50% of 10%, to which I contributed enough to get the full company match last year. Furthermore, upon hearing that I can legally max out my 2017 Roth IRA contributions in 2018 as long as it is done before the tax filing deadline, I just recently made a full 2017 contribution of $5,500 in a Vanguard S&P 500 Index Fund. I now have a savings account with roughly $26k in it, that I am trying to move into the market.

Basic Info
Debt: About $15,000 left on my auto loan payment - 40 months left @ $379/mo. 4.69% APR
Tax Filing Status: single
Tax Rate: 22% Federal in 2018
State of Residence: New York
Age: 25
Desired Asset allocation: This I am not sure of

My personal situation is a bit up in the air right now, as I just recently moved back in with my parents so I am fortunate enough have extremely minimal living expenses. Therefore, I figured I'd take this opportunity to finally jump into the world of investing (yes, something that I probably should have done a long time ago) I do not plan on making any big purchases any time soon, and for these reasons, I feel I have a good opportunity to invest aggressively for the time being.

Am I foolish for thinking this? I want to go out on a limb and say I'd like to move all of the aforementioned Savings Bonds to stocks and maintain a 100/0 asset allocation of all stocks while I am young (while keeping a few months worth of living expenses in a savings account.)

Beyond that, I figure it's a no-brainer to contribute enough to the 401k to get the full company match and continue to max out my Roth IRA annually, but beyond that I have some questions.

Should I be paying off that Auto Loan payment more aggressively or should I be using the opportunity to put that money elsewhere? I am very into the whole investing world right now but I am also honest with myself and know my tendency to change hobbys like I change clothes so I do not feel comfortable attempting to pick individual stocks and getting burned in the long run.

If you are ok with me going aggressive on stocks, care to suggest some specific low cost index funds and the percentage of my portfolio that they should take up?

Thanks in advance for any advice at all. Cheers!

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Sandtrap
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Location: HawaiišŸ˜€ Northern AZ.šŸ˜³

Re: Age 25 - New to Investing, Looking for Advice

Post by Sandtrap » Mon Feb 12, 2018 9:28 pm

Welcome :D
Congratulations on your successes.

Given you age and situation, it would be prudent to build your own "safety net" based on the premise that:
1. You lose your job.
2. You need to rent a place of your own (security deposit, first and last months rent, etc.
3. Your car breaks down and you need another one.
4. You meet "the one" and need to rent a place, or other scenario.
5. You encounter large medical or trauma expense.
6. Any or combinations of the above all at once.

Tier 1 - Emergency Fund - 6 months expenses/income saved in high yield account.
Tier 2 - Intermediate term savings. Security of principal. CD's, etc. Short term goals, home, etc.
Tier 3 - Retirement savings.

The amounts are dependent on your unique situation but this these are some points to consider.

Steps:
1 reduce debt.
2 simplify
3 invest for the "long term" not short term.

Read the following:
Suggested Reading List
https://www.bogleheads.org/RecommendedReading.php
Forum Library of Investing Advice with links
https://www.bogleheads.org/wiki/Main_Page

Free Reading: "If You Can" by Bernstein
https://www.google.com/url?sa=t&rct=j& ... -SB3S580I5

mahalo,
j :D
Last edited by Sandtrap on Mon Feb 12, 2018 9:33 pm, edited 2 times in total.

chevca
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Re: Age 25 - New to Investing, Looking for Advice

Post by chevca » Mon Feb 12, 2018 9:31 pm

Pay off the car tomorrow... get rid of that monthly payment and that APR! That will free up monthly cash flow. Put $5500 into your Roth for 2018 tomorrow as well. Use your cash for these two things.

Then start thinking about maxing your 401k each year. Tell us more about that, what funds are available, and the expense ratios.

Great job starting so young!

MotoTrojan
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Joined: Wed Feb 01, 2017 8:39 pm

Re: Age 25 - New to Investing, Looking for Advice

Post by MotoTrojan » Mon Feb 12, 2018 9:37 pm

Agreed on car; at that interest rate it is a no-brainer, tax-free return. Cash-flow it into investing more in your 401k, striving to max it and your Roth every year.

Look at portfolio as one entity, and then place funds efficiently for expense ratio (can be bad for 401ks) and taxes (doesn't matter much without a taxable account or much in bonds).

At 25, if you understand market risk (won't sell in a downturn) 100% equity is fine. I'd allocate 25-35% to International and rebalance with contributions and/or annually.

Total US over S&P500 where applicable (401k may be tougher) but they are similar enough it doesn't matter.

If you want to be hands-off, consider just using a Target Retirement 2060 type fund in 401k & Roth. Plenty risky with 10% bonds, and will allow you to just watch (or don't) the money grow, without any worries at all.

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FiveK
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Re: Age 25 - New to Investing, Looking for Advice

Post by FiveK » Mon Feb 12, 2018 9:51 pm

See Investment Order for some general advice that may serve well.

muney3
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Joined: Mon Feb 12, 2018 8:40 pm

Re: Age 25 - New to Investing, Looking for Advice

Post by muney3 » Mon Feb 12, 2018 9:57 pm

Thanks for the quick responses guys!

I understand what you say about the car loan. The reason I was not so quick to pay it off in full was because I was unsure if there was a better place to put my money elsewhere (sure the full payment would save me a guaranteed few % but that money could grow to way more than that few % if I made a long term investment with it) Any thoughts on that?

As for my 401k, I read a lot about the target date index funds, and actually it was Jim Cramer's book that discouraged me from putting my money into these. His theory was that the target funds (while low cost) are still higher cost than low-cost index funds and that they are geared towards the "average" investor while obviously not taking personal situations and comfort levels into account. I'm in no position to agree or disagree with this but any thoughts on that?

I am not sure if you need more info but I listed my 401k options below - along with the % that each makes up in my portfolio. I'm very excited to hear any recommendations!

Thanks in advance!!!!!

401k Options as follows:

Small/Mid/Specialty
DFA Real Estate Securities Portfolio - Institutional Class
DFA U.S. Targeted Value Portfolio - Institutional Class
VanguardĀ® Mid-Cap Index Fund - AdmiralĀ™ Shares -------- 25%
American Century Mid Cap Value Fund - R6 Class
ClearBridge Small Cap Growth Fund - Class IS
VanguardĀ® Small-Cap Index Fund - AdmiralĀ™ Shares -------- 25%
Voya Mid-Cap Growth Equity Fund - Class 8 CIT

Balanced
American Funds American Balanced FundĀ® - Class R-6

Global / International
American Funds New World FundĀ® - Class R-6

Large Cap Value
American Funds Washington Mutual Investors FundSM - R-6
JPMorgan U.S. Equity Fund - Class R6 Shares -------- 25%

Large Cap Growth
American Funds The Growth Fund of AmericaĀ® - Class R-6
Voya Large Cap Growth Fund - Class 8 CIT

Global / International
Ivy International Core Equity Fund - Class N
Oppenheimer International Growth Fund - Class I
American Funds New Perspective FundĀ® - Class R-6

Bonds
Prudential High Yield Fund - Class Q
DFA Inflation-Protected Securities Portfolio - Inst Class
Loomis Sayles Bond Fund - Class N
Voya Intermediate Bond Fund - Class R6

Large Cap Value
VanguardĀ® 500 Index Fund - AdmiralĀ™ Shares -------- 25%

Asset Allocation (there are a bunch of other target date funds that would obviously not apply to me)
VanguardĀ® LifeStrategyĀ® Conservative Growth Fund- Investor
VanguardĀ® LifeStrategyĀ® Growth Fund - Investor
VanguardĀ® LifeStrategyĀ® Income Fund - Investor
VanguardĀ® LifeStrategyĀ® Moderate Growth Fund - Investor
VanguardĀ® Target Retirement 2060 Fund - Investor Shares
VanguardĀ® Target Retirement Income Fund - Investor Shares

Stability of Principal
Voya Fixed Account (4062)

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FiveK
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Re: Age 25 - New to Investing, Looking for Advice

Post by FiveK » Mon Feb 12, 2018 10:06 pm

muney3 wrote: ā†‘
Mon Feb 12, 2018 9:57 pm
...the target funds (while low cost) are still higher cost than low-cost index funds and that they are geared towards the "average" investor while obviously not taking personal situations and comfort levels into account. I'm in no position to agree or disagree with this but any thoughts on that?
Calculate the actual cost difference for your situation. E.g., a 0.1%/yr difference on $30K is $30/yr. Up to you whether that makes it worth your time to monitor and rebalance.
VanguardĀ® Target Retirement 2060 Fund - Investor Shares
You could do worse than 100% into this. Set it, forget it, get on with your day job and check back in 5 or 10 years.

Of course, that's assuming the 401k expense ratios are the same as one would get in a Vanguard IRA. Are they?

itsgot8
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Re: Age 25 - New to Investing, Looking for Advice

Post by itsgot8 » Mon Feb 12, 2018 10:08 pm

What are the expense ratios for the available funds in your 401k?

chevca
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Re: Age 25 - New to Investing, Looking for Advice

Post by chevca » Mon Feb 12, 2018 10:09 pm

Thoughts on the car.... yes, pay it off. :happy That's a high interest rate and maybe not all that easy to beat. Get rid of that anchor.

Skip the JP Morgan equity fund. There's likely some overlap with the S&P 500 fund and I'd bet the expense ratio is higher. The S&P 500 fund is all you need for the large cap part in your 401k. Going with 25% each to small and mid cap is a pretty aggressive tilt toward those. That could pay off, or could under perform. As long as you're aware of and okay with that, go ahead. What is it, something like 80/15/5 is close to the total market breakdown? You would be 50/25/25.

MotoTrojan
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Re: Age 25 - New to Investing, Looking for Advice

Post by MotoTrojan » Mon Feb 12, 2018 10:16 pm

Risky 401k with the small/mid-cap, I'd stay closer to Target Retirement or 3-fund for now. The expense ratios on your 401k will be a big deciding factor, but as mentioned above, unless you are talking about 25-100bp differences, ignore Cramer.

As to the car loan, after it is paid off you can then cash-flow and get those assets into higher (expected) returning investments, so it isn't like you are losing out on decades of growth for that $15K. At that APR, it really is a no-brainer to pay it in full. You can't get even close to that with bonds, and even stocks could be argued to have an expected real, after-tax return less than that, based on current valuations. At the end of the day, the differences are small either way, but I feel it would be best to get the guaranteed return now, and then get in the habit of cash-flowing more into investments. Factor in the tax-savings of the cash-flow enabling you to max or increase your 401k contribution, and that tips it even more in favor of just paying it off.

muney3
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Joined: Mon Feb 12, 2018 8:40 pm

Re: Age 25 - New to Investing, Looking for Advice

Post by muney3 » Mon Feb 12, 2018 10:49 pm

itsgot8 wrote: ā†‘
Mon Feb 12, 2018 10:08 pm
What are the expense ratios for the available funds in your 401k?
See the expense ratios in parentheses (%)

Small/Mid/Specialty
DFA Real Estate Securities Portfolio - Institutional Class (.18)
DFA U.S. Targeted Value Portfolio - Institutional Class (.37)
VanguardĀ® Mid-Cap Index Fund - AdmiralĀ™ Shares (.06) -------- 25%
American Century Mid Cap Value Fund - R6 Class (.66)
ClearBridge Small Cap Growth Fund - Class IS (.78)
VanguardĀ® Small-Cap Index Fund - AdmiralĀ™ Shares (.06) -------- 25%
Voya Mid-Cap Growth Equity Fund - Class 8 CIT

Balanced
American Funds American Balanced FundĀ® - Class R-6 (.29)

Global / International

American Funds New World FundĀ® - Class R-6 (.64)

Large Cap Value
American Funds Washington Mutual Investors FundSM - R-6 (.3)
JPMorgan U.S. Equity Fund - Class R6 Shares (.5) -------- 25%

Large Cap Growth
American Funds The Growth Fund of AmericaĀ® - Class R-6 (.33)
Voya Large Cap Growth Fund - Class 8 CIT

Global / International
Ivy International Core Equity Fund - Class N (.82)
Oppenheimer International Growth Fund - Class I (.69)
American Funds New Perspective FundĀ® - Class R-6 (.45)

Bonds
Prudential High Yield Fund - Class Q (.41)
DFA Inflation-Protected Securities Portfolio - Inst Class (.12)
Loomis Sayles Bond Fund - Class N (.58)
Voya Intermediate Bond Fund - Class R6 (.31)

Large Cap Value
VanguardĀ® 500 Index Fund - AdmiralĀ™ Shares -------- (.04) 25%

Asset Allocation (there are a bunch of other target date funds that would obviously not apply to me)
VanguardĀ® LifeStrategyĀ® Conservative Growth Fund- Investor (.13)
VanguardĀ® LifeStrategyĀ® Growth Fund - Investor (.15)
VanguardĀ® LifeStrategyĀ® Income Fund - Investor (.12)
VanguardĀ® LifeStrategyĀ® Moderate Growth Fund - Investor (.14)
VanguardĀ® Target Retirement 2060 Fund - Investor Shares (.15)
VanguardĀ® Target Retirement Income Fund - Investor Shares (.13)

Stability of Principal
Voya Fixed Account (4062)

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badbreath
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Re: Age 25 - New to Investing, Looking for Advice

Post by badbreath » Mon Feb 12, 2018 10:56 pm

At your age I would be doing 100% VanguardĀ® 500 Index Fund - AdmiralĀ™ Shares and then forget it till your 50.
ā€œWhile money canā€™t buy happiness, it certainly lets you choose your own form of misery.ā€ Groucho Marx

RRAAYY3
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Joined: Thu Jan 17, 2013 12:32 pm

Re: Age 25 - New to Investing, Looking for Advice

Post by RRAAYY3 » Mon Feb 12, 2018 11:00 pm

Pay the car off tomorrow

Look at it as ā€œguaranteed returnā€ on the money especially if you donā€™t need to finance

(I just did this myself.)

ef11
Posts: 195
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Re: Age 25 - New to Investing, Looking for Advice

Post by ef11 » Mon Feb 12, 2018 11:17 pm

First of all, congrats on finding this forum at a young age. I posted almost the exact same thread when I was 23 and just out of college with my first job, also as an engineer. It is now six years later and becoming engaged on this forum is one of the best things I have ever done.

My advice for you is as follows:
- Pay off the car loan immediately.
- Contribute another $5,500 for your 2018 Roth IRA and put your entire Roth IRA into a Target Date 2055/2060 type fund.
- Max out your Traditional 401K with $18,500 worth of contributions in 2018 and put your entire 401K into the Vanguard 2060 Target Date fund.
- Create a way to track all income and expenses each month to monitor your finances. I use a fairly straightforward spreadsheet.

At your age the most important thing, much more important than your investment choices themselves, is saving money. Contribute to Roth, max out 401K, and then look at either Mega Backdoor Roth or starting a taxable account. Keep it simple by using the Target Date funds and rest assured through all market conditions that you are doing the absolute best you can do and stay the course.

Below is a thread that outlines my 6 year journey, with most of the growth and savings being in years 4, 5, and 6. You can achieve these results or more by savings and sticking to the plan.

viewtopic.php?t=236535
45% Vang S&P500 Fund ER .011% | 10% Vang Extended Market Fund ER .038% | 25% ACWI EX US IMI NL R ER .10% | 10% Vang Total Bond Market ER .027% | 10% Fidelity MSCI Real Estate ER 0.084%

WhatsUpB
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Joined: Sun Aug 18, 2013 9:17 pm

Re: Age 25 - New to Investing, Looking for Advice

Post by WhatsUpB » Mon Feb 12, 2018 11:35 pm

muney3 wrote: ā†‘
Mon Feb 12, 2018 9:12 pm
I am a 25 year old engineer thats just looking for any personalized advice. My salary is 85k, I have about $10,000 worth of Series EE Savings bonds that I had been given as a baby (about half of which have reached maturity.) My company offers a 401(k) matching 50% of 10%, to which I contributed enough to get the full company match last year. Furthermore, upon hearing that I can legally max out my 2017 Roth IRA contributions in 2018 as long as it is done before the tax filing deadline, I just recently made a full 2017 contribution of $5,500 in a Vanguard S&P 500 Index Fund. I now have a savings account with roughly $26k in it, that I am trying to move into the market.

Basic Info
Debt: About $15,000 left on my auto loan payment - 40 months left @ $379/mo. 4.69% APR
Tax Filing Status: single
Tax Rate: 22% Federal in 2018
State of Residence: New York
Age: 25
Desired Asset allocation: This I am not sure of
Hey man, I was in your same shoes approx five years ago (31 now)! Learned a lot since then mostly thanks to this form. I would suggest the following which most other has spoken to in various ways.

Debt: Payoff $15,000 and go to $0 - Do it this week and call it a day. You will quickly build up your retirement accounts regardless.
Roth IRA: $11,000 - Put in 2018 now and then in 2019 if you have the savings keep refunding in Jan or just auto debt $500 a month (skipping Dec. each year).
Emergency Fund: $10k in EE Savings Bonds - As EE Bonds mature move to cash in a high interest savings along with leftover cash (I personally use Ally online checking ). This is not an account you use to pay bills.
Checking Account: $5,500 remaining savings goes here along with paychecks. Let balance build over time while funding 401k described below and reevaluate your cash flow at the end of this year.

Retirement Contributions 2018:

$5,500 ROTH IRA
$18,500 401k

Investments
Roth IRA: Vanguard Target Date 2060 (VTTSX)
401k: VanguardĀ® Target Retirement 2060 Fund - Investor Shares (.15)

Key Takeaways
1. I understand how exciting it is to find this site, taking ownership of your investments, and picking investments. With that said, there is no need to be slicing and dicing your investments in your ROTH or 401k until you hit a balance of ~100k. At that point you can start buying the individual indexes if you really want to manage your asset allocation.

2. I understand bonds aren't sexy but its great having that 10% to re balance when stocks tank (your emergency fund EE bonds aren't part of your retirement portfolio). There are charts floating around in other posts showing there is very minimal gain going 100/0 or 90/10. The only real thing you get are even larger swings for marginal gain. The vanguard target date fund is only 10% bonds so perfect there.

3. Do everything to max your ROTH and 401k each year. ROTH covered above. For 401k, I'd suggest doing the math and changing your contribution to what it will take to max out on last paycheck in 2017. Try it out for next few months and see if you checking account is still cash flow positive. With the $5.5k buffer to start and low living expense should be doable. As you get raises year over year you can keep reducing your contribution % to continue to max by last paycheck each year.

4. At end of 2017, come back, post results, and get more feedback for your "Year 2". If you want to see how similar we are look at my previous posts on my profile. My first post is very much like yours and my last (a "Year 5" retrospective) shows how getting simple and organized really works.

WhatsUpB
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Joined: Sun Aug 18, 2013 9:17 pm

Re: Age 25 - New to Investing, Looking for Advice

Post by WhatsUpB » Mon Feb 12, 2018 11:37 pm

Wow ef11 we are very similar in what year of being a Boglehead we are, how we posted our journey, and the advice we gave in this thread. Crazy.

Muney, between myself and ef11 you have two people who were in your spot fiveish years ago. Reread our thoughts a few times and/or look at our previous posts to our current ones. My last post after Year 5 - viewtopic.php?f=1&t=240324 =)

jalbert
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Joined: Fri Apr 10, 2015 12:29 am

Re: Age 25 - New to Investing, Looking for Advice

Post by jalbert » Tue Feb 13, 2018 12:48 am

I strongly recommend avoiding mutual funds administered by investment banks like JPMorgan. Moreover, DFA Targeted Value is a much better way to get value exposure.

Vanguard S&P500 and midcap index overlap with each other.

DFA Targeted Value is designed to pair with a large cap fund like an S&P500 fund. Thus, I think a much better combination for US stock exposure would be to combine the S&P500 fund with DFA Targeted Value.

There really isn't an overly compelling int'l equity fund. American Funds New World Fund is probably the best one.

There also isn't an overly compelling bond fund. The Voya intermediate bond fund is probably the best.

I think your best option in terms of highest likelihood of success is to just hold 100% in the Vanguard LifeStrategy Growth Fund or a Target Retirement fund.

If you must hold individual funds, it is important to resist the temptation to tinker with it every few months based on what performed best. But for separate funds, you might hold:

45% Vanguard S&P500 fund (large-cap US equity)
15% DFA Targeted Value (small/mid-cap value US equity)
25% American Funds New World Fund (int'l equity)
15% Voya Intermediate Bond Fund (bonds)
Last edited by jalbert on Tue Feb 13, 2018 10:44 pm, edited 1 time in total.
Risk is not a guarantor of return.

itsgot8
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Joined: Thu Dec 14, 2017 11:20 am

Re: Age 25 - New to Investing, Looking for Advice

Post by itsgot8 » Tue Feb 13, 2018 10:58 am

muney3 wrote: ā†‘
Mon Feb 12, 2018 10:49 pm
itsgot8 wrote: ā†‘
Mon Feb 12, 2018 10:08 pm
What are the expense ratios for the available funds in your 401k?
See the expense ratios in parentheses (%)

Large Cap Value
American Funds Washington Mutual Investors FundSM - R-6 (.3)
JPMorgan U.S. Equity Fund - Class R6 Shares (.5) -------- 25%

Large Cap Value
VanguardĀ® 500 Index Fund - AdmiralĀ™ Shares -------- (.04) 25%



Stability of Principal
Voya Fixed Account (4062)
Not a fan of that 0.5 on the JP fund. I would just roll that into the S&P 500 fund and call it a day.

deltaneutral83
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Joined: Tue Mar 07, 2017 4:25 pm

Re: Age 25 - New to Investing, Looking for Advice

Post by deltaneutral83 » Tue Feb 13, 2018 12:13 pm

Pay off car immediately, get that 2018 Roth money into a Total US stock market index ASAP, you just had access to a 12% discount last Friday afternoon, and currently US stocks are on sale at 8% off. Your 401k I would just go with the 500 fund. You can go 90% 500 fund and 10% small cap fund to get it close to the US Total without tinkering too much if you choose. Given that you are an engineer and the engineers that I know you are about the last group of people that need to go the Target Fund route, it's just not going to be a problem for you to manage a 3F. 100/0 asset allocation is fine, but the true test will be when the bear comes out of the woods when you have sizable balances and then you will have a better idea. Until you get as six figure account, I'd zero in on a Total US index and then you can reassess (INTL or bonds??) across all your accounts.

jalbert
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Joined: Fri Apr 10, 2015 12:29 am

Re: Age 25 - New to Investing, Looking for Advice

Post by jalbert » Tue Feb 13, 2018 3:38 pm

Given that you are an engineer and the engineers that I know you are about the last group of people that need to go the Target Fund route...
Engineers are trained always to want to optimize processes and designs, which is tremendously beneficial in most domains, but can lead to a need to tinker with a portfolio regularly, which will lower expected risk-adjusted return. While many engineers have the temperment to manage their own portfolio well, there also are many who would benefit from using a LifeStrategy or Target Retirement fund or similar product from another provider.
Risk is not a guarantor of return.

muney3
Posts: 5
Joined: Mon Feb 12, 2018 8:40 pm

Re: Age 25 - New to Investing, Looking for Advice

Post by muney3 » Tue Feb 13, 2018 4:22 pm

Hi guys. Just wanted to drop back in and thank you all tremendously for all of the responses.

To keep you updated: You all convinced me to pay off the car loan this morning. I did the math and I saved a guaranteed ~7.5% by doing so.

As a vague general summary, my goals for 2018 (per this forum's recommendation) will be
1. Continue to contribute enough to my 401k to receive the full company match
2. Max out my Roth IRA contributions for the year asap
3. Continue to contribute to my 401k until I max those contributions out as well
4. All while keeping my living expenses low enough to at least keep my checking/savings accounts moving in the positive direction

I also greatly appreciate the extremely specific recommendations regarding my available funds. I am going to review all of these in greater detail tonight.

I have one last question for you all though... am I crazy to be worried that my goals for the year are geared so much towards my future/retirement that I am going to lose track of living in the present? I understand that I do not see any huge expenses in my foreseeable future, but should I at least be contributing something towards a future house/family/etc.?

Or is this all part of the master plan, and perhaps I should start worrying about these once my 401k/roth have a decent chunk of change in them first...

jalbert
Posts: 2844
Joined: Fri Apr 10, 2015 12:29 am

Re: Age 25 - New to Investing, Looking for Advice

Post by jalbert » Fri Feb 16, 2018 11:33 pm

I have one last question for you all though... am I crazy to be worried that my goals for the year are geared so much towards my future/retirement that I am going to lose track of living in the present? I understand that I do not see any huge expenses in my foreseeable future, but should I at least be contributingĀ somethingĀ towards a future house/family/etc.?
There would be no reason to forgo a Roth contribution to stash the funds in a taxable savings or investment account-- the Roth contribution principal can always be withdrawn penalty-free and tax-free. It is not advisable to do that if you can avoid it, but the other direction is not possible (i.e. making the Roth contribution years later for tax years many years prior).

You no doubt hope your salary increases over time, and this may be able to drive a higher savings rate. Unless you have a home purchase actually already targeted, I think the retirement account contributions are preferred.
Last edited by jalbert on Sat Feb 17, 2018 2:57 am, edited 1 time in total.
Risk is not a guarantor of return.

btr
Posts: 8
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Re: Age 25 - New to Investing, Looking for Advice

Post by btr » Sat Feb 17, 2018 1:43 am

muney3 wrote: ā†‘
Tue Feb 13, 2018 4:22 pm
I have one last question for you all though... am I crazy to be worried that my goals for the year are geared so much towards my future/retirement that I am going to lose track of living in the present? I understand that I do not see any huge expenses in my foreseeable future, but should I at least be contributing something towards a future house/family/etc.?
Edit --> Woops, misunderstood the question.

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