Where to invest

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goonkidd
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Where to invest

Post by goonkidd » Tue Apr 24, 2018 3:03 am

Thank you all, below is more information:

Do you have any debt, if so what types, amounts and interest rates?
Have two mortgages from rental properties. Together owe $500k. Earn $3100 rental income/month combined.

What is your tax bracket, both federal and state? What is your tax fling status?
tax bracket not sure, filing married jointly.

Do you have any investing/retirement accounts other than the TSP account?
Have two other investment accounts at $68k in stocks and mutual funds.

How much are you contributing annually to your TSP account? What funds are you using in your TSP account?
Maxing out TSP at 15% with funds of G at 32%, F at 7%, C at 33%, S at 10%, and I at 18%.
Last edited by goonkidd on Wed Apr 25, 2018 11:15 pm, edited 1 time in total.

22twain
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Re: Where to invest

Post by 22twain » Tue Apr 24, 2018 6:41 am

Welcome to Bogleheads! :D

Since you mention the TSP you might have a federal job which I suppose is likely to be fairly secure. In that case I'd invest all of the $500K except for maybe 6 months worth of expenses. Some people prefer more in cash, some prefer less. It's a matter of personal preference and psychology.

As for where, the default recommendation here is Vanguard because of its low-cost mutual funds. Fidelity and Schwab also have decent choices among their funds, but you have to be careful to look for the low-cost options. You may prefer one of those two if you want a walk-in office nearby instead of doing everything online or by phone or mail.

I suppose you also want to figure out what, specifically, to invest in? To give useful, focused advice about that, we need more information about your total financial picture and psychology. Please see the post Asking Portfolio Questions which is a "sticky" at the top of this forum, for a guide:
My investing princiPLEs do not include absolutely preserving princiPAL.

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ruralavalon
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Re: Where to invest

Post by ruralavalon » Tue Apr 24, 2018 9:36 am

Welcome to the forum :) .

goonkidd wrote:
Tue Apr 24, 2018 3:03 am
Hello,

Have $500K in savings and wanting to know what portion and where to invest? Have 15 years to retire and already have a TSP with a balance of $400k

Thanks.
Some additional information would be very useful.

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

What is your tax bracket, both federal and state? What is your tax fling status?

Do you have any investing/retirement accounts other than the TSP account?

How much are you contributing annually to your TSP account? What funds are you using in your TSP account?

Please simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.

. . . . .


You could increase your TSP contributions if you are not already making the maximum contributions. You could open a traditional or Roth IRA if eligible given the income limits. Your spouse if any could also open a traditional or Roth IRA if eligible. You could also open an individual or joint taxable account.

I suggest an account or accounts at
1) Vanguard, or
2) Fidelity, or
3) Schwab,
in that order of preference.

Vanguard has by far the largest selection of low expense mutual funds and ETFs. There are no commissions or transaction fees for Vanguard funds or ETFs held in an account at Vanguard. At Vanguard there will be no sales pitches to buy more expensive funds.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Sandtrap
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Re: Where to invest

Post by Sandtrap » Tue Apr 24, 2018 9:41 am

goonkidd wrote:
Tue Apr 24, 2018 3:03 am
Hello,

Have $500K in savings and wanting to know what portion and where to invest? Have 15 years to retire and already have a TSP with a balance of $400k

Thanks.
Welcome.
It may be more helpful to you to get suggestions in a greater financial context by adding the "portfolio review" format to your original post. (simply edit with the pencil icon)
Like this:
Asking Portfolio Questions
https://www.bogleheads.org/forum/viewt ... =1&t=6212
Start here while you are doing the above:
GETTING STARTED
https://www.bogleheads.org/wiki/Getting_started

aloha
j :D

mega317
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Re: Where to invest

Post by mega317 » Tue Apr 24, 2018 11:57 am

I agree you need to post a complete portfolio review.

With posts like this I always wonder why so much "savings" (which I assume is in cash or something similar)? Some people just had a windfall, others are very risk-averse, still others have simply been clueless and are now getting a clue. The recommendations might be different for each situation.

goonkidd
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IRA question

Post by goonkidd » Tue May 29, 2018 3:13 am

[Thread merged into here, see below. --admin LadyGeek]

I have a TSP plan through my employer where I invest the full $18,000/year and my wife has her own IRA that she contributes $5,500/year. My question is, can either one of us open another IRA and invest more without incurring the 6% IRS penalty? Our AGI is less than $180k, my wife does not work and we file jointly.

Thanks.

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oldcomputerguy
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Re: IRA question

Post by oldcomputerguy » Tue May 29, 2018 5:55 am

I'm not thoroughly familiar with the TSP, but I assume that it is a 401(k)-type plan, since you contributed $18,000. Given that, you should be able to open and fund an IRA if you want, as long as your total contributions to all IRA accounts you own do not exceed the $5,500 limit. She, however, has maxed out her contribution for 2018, and so cannot contribute any more this year. Even if she opens another IRA account somewhere (and there is nothing preventing her from doing that), she cannot fund it this year. The $5,500 annual limit applies to all IRA accounts owned by a person taken together, not to each account separately. (Note that the IRA contribution limit applies individually to each of you; your contributions to your IRAs do not count against her limit, and vice versa.)
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

retiredjg
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Re: IRA question

Post by retiredjg » Tue May 29, 2018 6:57 am

Agree. You can contribute your full $18,500 to the TSP and each of you can contribute $5,500 to IRA. Each year. The IRA can be traditional or Roth or a combination of the two.

In your case, since you are covered by the TSP, your IRA contribution may not be deductible - I think your AGI limit is about $101k (where the phase out starts). If over that limit, use Roth IRA.

In her case, the contribution to tIRA can be deductible if you want since your AGI is under $189k, but I'd suggest Roth IRA for each of you if you are expecting to get a pension.

https://www.irs.gov/retirement-plans/pl ... an-at-work

https://www.irs.gov/retirement-plans/pl ... an-at-work

goonkidd
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Re: IRA question

Post by goonkidd » Wed May 30, 2018 1:52 am

Thanks. So, just to ask again, in addition to my TSP/401k being fully funded along with my wife's Roth, can I separately open another IRA and dump another $5,500 into it?

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brother7
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Re: IRA question

Post by brother7 » Wed May 30, 2018 5:35 am

goonkidd wrote:
Wed May 30, 2018 1:52 am
Thanks. So, just to ask again, in addition to my TSP/401k being fully funded along with my wife's Roth, can I separately open another IRA and dump another $5,500 into it?
TRADITIONAL IRA
Yes. As long as you have earned income, you can always contribute to a Traditional IRA.

However, the DEDUCTIBILITY of your Traditional IRA contribution has income limits. For MFJ AND you are covered by a retirement plan at work, deductibility phaseout begins at MAGI = 101,000 and is completely phased out at MAGI = 121,000.
Reference: Effect of Modified AGI on Deductible Contributions If You ARE Covered by a Retirement Plan at Work

ROTH IRA
The ABILITY to make Roth IRA contributions is determined by your MAGI. For MFJ, ability to contribute phaseout begins at MAGI = 189,000 and is complete phased out at MAGI = 199,000
Reference: Amount of Roth IRA Contributions That You Can Make for 2018

retiredjg
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Re: IRA question

Post by retiredjg » Wed May 30, 2018 6:35 am

This is a confusing subject.

Any person with compensation who is not yet 70.5 can contribute to a traditional IRA. There are income limits on whether the contribution to tIRA is deductible or not. If it is deductible, it reduces your taxable income. If it is not deductible, it does not reduce your taxable income (which makes Roth IRA a better choice).

The income limits are different for different situations. Your limit is one number because you are covered by a plan at work. Your spouse's limit is a different number because she is not covered by a plan at work but she is married to someone covered by a plan at work.

If neither of you were covered by a plan at work, your tIRA contributions would be deductible regardless of income.


There is a different set of rules for Roth IRA but since you said your AGI is less than $180k (lower limit is $189k), you can both contribute to Roth IRA....even with the plan at work.

goonkidd
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Advice for bad advice

Post by goonkidd » Thu May 31, 2018 2:08 am

[Thread merged into here, see below. --admin LadyGeek]

Hello,

I took some bad advice 5 years ago and opened a TD Ameritrade account and thankfully only invested $2,000 in about 22 individual stocks.......I know stupid...stupid. My portfolio luckily has gained some $300 in those 5 years and after being on this forum, thinking of closing this account and instead investing in the three Vanguard fund strategy.

Can BH give me sound advice on how I should proceed?

Thanks.

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celia
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Re: Advice for bad advice

Post by celia » Thu May 31, 2018 2:13 am

Did you invest $2,000 in total or $2,000 in each of 22 companies (for a $44,000 investment)?
What kind of account was it (taxable, tax-deferred, Roth)?
Do you have any other financial assets?

goonkidd
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Re: Advice for bad advice

Post by goonkidd » Thu May 31, 2018 2:44 am

I only invested $2,000 total in a taxable account. I have a 401k, Roth, and Traditional IRA as well. I have $600k in emergency fund, which I'd like to invest a portion of in Vanguard funds. My 401k and Roth's are fully funded.

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LiveSimple
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Re: Advice for bad advice

Post by LiveSimple » Thu May 31, 2018 2:54 am

A couple of option, I do see
  • Sell all stocks, close the account and reinvest in mutual funds
    Transfer in kind, close the account
Last edited by LiveSimple on Thu May 31, 2018 2:56 am, edited 1 time in total.

stan1
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Re: Advice for bad advice

Post by stan1 » Thu May 31, 2018 2:55 am

OK, the easy part. Just go in and sell everything in the $2300 taxable account. That's less than 1% of your $600K emergency fund. Just clear it out and move on. TD Ameritrade will calculate any capital gains tax owed and issue you a 1099 next February. Just enter what they give you on your 2018 tax return next year (or give the 1099 to your accountant if you use one). If these are long term gains the amount of tax owed may be well under $50.

Now ... why do you have a $600K emergency fund? That matters much more but we need to look at your entire portfolio including 401Ks, IRAs plus debt and home ownership plans to help you with that.

goonkidd
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Re: Advice for bad advice

Post by goonkidd » Thu May 31, 2018 3:22 am

Thank you again, hopefully I'm on the path to better financial guidance thanks to this great forum. Ok, to get back to my 600k in emer fund is really due to my own lack of security. I have a stable job, two investment properties that are rented but cover about 70% of my mortgage, so am happy to keep them and write off the tax deductions. Based on what I have read here, I'm thinking of allocating 10% of my emer fund to the three Vanguard fund strategy.

RickBoglehead
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Re: Advice for bad advice

Post by RickBoglehead » Thu May 31, 2018 5:33 am

Can't imagine having $600,000 in an emergency fund unless my monthly expenses were $25,000 (24 months).

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Re: Advice for bad advice

Post by Grt2bOutdoors » Thu May 31, 2018 6:18 am

RickBoglehead wrote:
Thu May 31, 2018 5:33 am
Can't imagine having $600,000 in an emergency fund unless my monthly expenses were $25,000 (24 months).
You can’t imagine it because you are not in OP’s shoes, but their are situations where having such a large pot of safety money makes perfect sense.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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whodidntante
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Re: Advice for bad advice

Post by whodidntante » Thu May 31, 2018 7:01 am

What is that 600k for? Is it just uninvested cash, or do you realistically need 600k for an emergency? Can you stand a real (after inflation) loss of 2%, 10%, 25%, 50%, or more with that money? I know you don't want any loss; none of us do. But you have to take risk if you want growth.

JoeRetire
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Re: Advice for bad advice

Post by JoeRetire » Thu May 31, 2018 7:13 am

Grt2bOutdoors wrote:
Thu May 31, 2018 6:18 am
RickBoglehead wrote:
Thu May 31, 2018 5:33 am
Can't imagine having $600,000 in an emergency fund unless my monthly expenses were $25,000 (24 months).
You can’t imagine it because you are not in OP’s shoes, but their are situations where having such a large pot of safety money makes perfect sense.
I'd love to hear from the OP the reasons why $600,000 emergency fund makes sense for him/her. As far as I can tell "due to my own lack of security" is the reason. Maybe that makes sense due to an exceedingly low risk tolerance.

MathIsMyWayr
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Re: Advice for bad advice

Post by MathIsMyWayr » Thu May 31, 2018 7:19 am

We are looking at $2,000 out of $600,000. It is a tiny fraction, around 0.3%, just a noise. You may consider it a part of EF and start over. No need to fret over small things. Any way, it worked out better than savings account :? .

BuckyBadger
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Re: Advice for bad advice

Post by BuckyBadger » Thu May 31, 2018 8:33 am

My concern is what the rest of the portfolio (IRA, 401k) is invested in. Hopefully not also individual stocks?

A $2300 account is barely noise here. Just cash it out and do whatever you want with the $2300...

Lafder
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Re: Advice for bad advice

Post by Lafder » Thu May 31, 2018 8:40 am

Take the time to post all of your holdings in this format so you can make a comprehensive plan including how much of your cash to invest or hold as an emergency fund. We can help be sure your retirement accounts are optimized and fit in with the rest of your plan.

What is your desired asset allocation?

As others have said, this 2300$ is a small % of the total. You are losing much more if the rest of your holdings are at high expense or not as you want them to be.

viewtopic.php?f=1&t=6212

lafder

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Re: Advice for bad advice

Post by Easy Rhino » Thu May 31, 2018 1:02 pm

The dollar amount really doesn't matter in the scope of your overall portfolio.

You can sell it all if you want to simplify.

You can keep it if you want to see stock holdings fluctuate up and down for fun.

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celia
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Re: Advice for bad advice

Post by celia » Thu May 31, 2018 11:21 pm

goonkidd wrote:
Thu May 31, 2018 2:44 am
I only invested $2,000 total in a taxable account. I have a 401k, Roth, and Traditional IRA as well. I have $600k in emergency fund, which I'd like to invest a portion of in Vanguard funds. My 401k and Roth's are fully funded.
If you have only $2,000 total for 22 stocks, that means the average value for each stock is under $100. If that is correct, you should first find out what the commission is for buying or selling the stocks. That could be anywhere from free to $50 a trade. (You will have to pay this fee 22 times.) There are a few places that will give you unlimited free trades for 30 days on new accounts, but if you will only save $100 by moving to the "free trade" brokerage, that may not be worth the time to move everything. Other places (like where you hold your other accounts) will offer lower commissions if your total balance is high.

If you were to move to another brokerage, you will need records showing exactly how much you paid for each holding (cost - commissions for buying). One nice thing about selling at the same brokerage you bought at, is that they will have these records and put it on the tax form for your capital gains/losses for when you do your 2018 tax return.

There's nothing wrong with TD Ameritrade, per se, but you need to know what you are buying and why. Mutual funds are better for beginners since each mutual fund share represents ownership in about 100 companies, so you are more diversified that when you hold individual companies. Then, if one company goes bust, it is a very small part of your portfolio.

goonkidd
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Invest 100k

Post by goonkidd » Tue Sep 11, 2018 2:55 am

[Thread merged into here, see below. --admin LadyGeek]

Hello Bogleheads,

I have 100k that I'd like to invest in my taxable Vanguard account for long term use but not sure where? This is money that I won't touch for at least 5+ years.

Not sure whether to purchase CDs, 3 fund portfolio, life strategy, or target date funds?

Advice greatly appreciated.

AlohaJoe
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Re: Invest 100k

Post by AlohaJoe » Tue Sep 11, 2018 3:01 am


zuma
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Re: Invest 100k

Post by zuma » Tue Sep 11, 2018 3:11 am

More info needed.

As suggested in your earlier thread, consider using the recommended format. Also, consolidate all your information in one post to make it easier for others to help you.

mortfree
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Re: Invest 100k

Post by mortfree » Tue Sep 11, 2018 4:49 am

60k VTSAX (or VTI)
40k CDs

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ruralavalon
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Re: Invest 100k

Post by ruralavalon » Tue Sep 11, 2018 11:40 am

zuma wrote:
Tue Sep 11, 2018 3:11 am
More info needed.

As suggested in your earlier thread, consider using the recommended format. Also, consolidate all your information in one post to make it easier for others to help you.
I agree.

Please simply add to your original post in this thread using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.

goonkidd wrote:
Tue Sep 11, 2018 2:55 am
Hello Bogleheads,

I have 100k that I'd like to invest in my taxable Vanguard account for long term use but not sure where? This is money that I won't touch for at least 5+ years.

Not sure whether to purchase CDs, 3 fund portfolio, life strategy, or target date funds?

Advice greatly appreciated.
Have you opened IRAs for each of you a low cost provider like Vanguard?

If not done already, then that is how you start for investing this $100k.

It's important to make full use of tax-advantaged accounts before investing in a taxable account. Also it's often better to coordinate investments among all accounts, rather than look at each account separately.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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LadyGeek
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Re: Where to invest

Post by LadyGeek » Tue Sep 11, 2018 3:25 pm

goonkidd - In order to give appropriate advice, it's best to keep all the information in one spot. Although you have are separate questions, they are all related to your portfolio. It's important that we see everything in context. I merged your threads into a single discussion.

As noted earlier, please post you portfolio information in this thread using the Asking Portfolio Questions format. It will make you think about the "big picture" while giving us the information we need to point you in the right direction.

If you have any questions, ask them here.
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