Looking for help investing 140k savings

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unyc
Posts: 6
Joined: Sun Sep 09, 2018 9:47 am

Looking for help investing 140k savings

Post by unyc » Sun Sep 09, 2018 10:17 am

Hello,

I'm looking to invest more of my savings and would like to hear recommendations on anything from specific funds I should invest in to how you would personally change things if you were in my shoes. I just started reading Bogleheads' Guide to Investing. One advisor I spoke to has an AMU fee of 1.5%. Before I make any decisions I'm trying to educate myself and get opinions from various sources.

Thank you for reading this!

About Me:
Income: $170,000
Net Worth: $324,000
Emergency funds: $60,000 (18% of Net Worth)
Debt: No debt/rent apartment
Tax Filing Status: single, no children
Tax Rate: 20% Federal, 6.4% State
State of Residence: NJ
State of work: NY
Age: 35
Desired Asset allocation: (researching this, but aggressive for my long term investment)
Desired International allocation: (researching this)

Current retirement assets

Taxable
25% $80,000 cash (would like to invest)

401k
27% $89,300
Vanguard Target 2050 (VFIFX) (0.15%)
Current Employee contribution: 15% (recently increased from 5%)
Company match: 3.5%

Company Stock ESPP
2% $7,203
I have not continued buying this and don't pay attention to it.

Roth IRA at Vanguard
5% $16,190
Vanguard LifeStrategy Growth Fund 2050 (VFIFX) (0.15%)

Mutual Fund at Vanguard
5% $15,000
VASGX Vanguard LifeStrategy Growth Fund (VASGX) (0.14%)


Contributions

New annual Contributions
$18,000 to 401k (3.5% employer matching = $5,600/year)
$2,600 taxable VASGX (for retirement)


Available funds:
TARGET DATE FUNDS
VANGUARD TARGET 2015 (VTXVX) 0.13%
VANGUARD TARGET 2020 (VTWNX) 0.13%
VANGUARD TARGET 2025 (VTTVX) 0.14%
VANGUARD TARGET 2030 (VTHRX) 0.14%
VANGUARD TARGET 2035 (VTTHX) 0.14%
VANGUARD TARGET 2040 (VFORX) 0.15%
VANGUARD TARGET 2045 (VTIVX) 0.15%
VANGUARD TARGET 2050 (VFIFX) 0.15%
VANGUARD TARGET 2055 (VFFVX) 0.15%
VANGUARD TARGET 2060 (VTTSX) 0.15%
VANGUARD TARGET 2065 (VLXVX) 0.15%


PASSIVELY MANAGED INDEX OPTIONS
FID 500 INDEX IPR (FXAIX) 0.015%
VANG SM CP IDX IS PL (VSCPX) 0.03%
FID GLB XUS IDX IPR (FSGGX) 0.06%
MELLON AGGR BD (MPBFX) 0.56%

ACTIVELY MANAGED OPTIONS
(investments provided by my plan sponsor)
LARGE CAP STOCK FUND 0.45%
SMALL MID CAP STOCK 0.68%
INTERNATIONAL FUND 0.56%
GLOBAL FIXED INCOME 0.56% Bond Investments

Questions:

Long Term
1. How would you invest $80,000 of savings for long term?

Short Term
3. How would you invest $60,000 for a short term 5-10 year goal of purchasing a home?
Last edited by unyc on Thu Sep 27, 2018 4:02 pm, edited 7 times in total.

PFInterest
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Joined: Sun Jan 08, 2017 12:25 pm

Re: Looking for opinions on investing my savings

Post by PFInterest » Sun Sep 09, 2018 10:53 am

unyc wrote:
Sun Sep 09, 2018 10:17 am
One advisor I spoke to has a fee of 1.5%. I liked her plan
the only thing you need to do....is not that.

also please update your post w/ this info: viewtopic.php?t=6212

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ruralavalon
Posts: 13962
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Looking for opinions on investing my savings

Post by ruralavalon » Sun Sep 09, 2018 11:10 am

Welcome to the forum :) .

unyc wrote:
Sun Sep 09, 2018 10:17 am
Hello,

I'm looking to invest more of my savings and would love to hear any opinions and recommendations on anything from specific funds I should invest in to how you would personally change things if you were in my shoes. I've talked to two financial advisors so far and I'm looking in to Vanguards advisors, too. I just started reading Bogleheads' Guide to Investing. One advisor I spoke to has a fee of 1.5%. I liked her plan, but before I make any decisions I'm trying to educate myself and get opinions from various sources.

Thank you for reading this!
The 1.5% fee is large. Is that a one time fee for helping you plan?

If that fee is an annual percentage of Assets Under Management (AUM), then you should definitely not go with that advisor. An annual fee that large literally kills your long-term returns.


unyc wrote:About Me:
35 years old
Single, rent apartment, no debt
Income: $170,000
401k: $86,000
Roth IRA: $15,000
Vanguard Target Mutual Fund: $14,000
Personal Savings: $200,000
Ability to save/invest about $4,000 a month from income

My goals:
Distribute my personal savings:
1. Invest up to 40% ($80,000) in long term investment to help build good retirement
2. Invest up to 30% ($60,000) in short term for possible home purchase in 5-10 years
3. Keep a large emergency fund ($60,000)
4. Plan for how to spread each paycheck leftover (about $800/week) among investments

This is my first post here. Learned about the site from the book! :happy
How much (in dollars) are you contributing annually to your 401k? How much (in dollars) are you contributing annually to your Roth IRA? Is the $800 per week ($41.6k/year) in addition to contributions to those tax-advantaged accounts?

What investments do you currently have in your 401k? What other funds are offered in your 401k? What investments do you have in your Roth IRA? Please give fund names, tickers and expense ratios.

Do you have a desired asset allocation (stock/bond mix, domestic/international stock mix) that you want to aim for?

What is your tax bracket, both federal and state?

You can 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. Please use the link provided by PFInterest for format.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

unyc
Posts: 6
Joined: Sun Sep 09, 2018 9:47 am

Re: Looking for opinions on investing my savings

Post by unyc » Sat Sep 22, 2018 1:01 pm

Thank you for your replies! I've edited my original post and added the information needed. Thank you!

Flyer24
Posts: 298
Joined: Sun Apr 08, 2018 4:21 pm

Re: Looking for help investing 140k savings

Post by Flyer24 » Sat Sep 22, 2018 1:17 pm

Stop putting money in taxable for retirement. You should be maximizing your 401K first. Your total 401K amount seems low for someone making 170K a year. I make roughly the same amount. I max out my 401K in addition to the 16% contribution from my company. So I have roughly $47K going into my 401K annually. Put it in now and let it grow.

unyc
Posts: 6
Joined: Sun Sep 09, 2018 9:47 am

Re: Looking for opinions on investing my savings

Post by unyc » Sun Sep 23, 2018 10:37 am

Flyer24 wrote:
Sat Sep 22, 2018 1:17 pm
Stop putting money in taxable for retirement. You should be maximizing your 401K first. Your total 401K amount seems low for someone making 170K a year. I make roughly the same amount. I max out my 401K in addition to the 16% contribution from my company. So I have roughly $47K going into my 401K annually. Put it in now and let it grow.
Thank you, @FLyer24. I increased my 401k contribution from 5% to 15%. Do you have any suggestions on what I should do with the money I have in savings? I think I have too much in cash and no plans on spending it, so I’d like to invest 80k long term.


ruralavalon wrote:
Sun Sep 09, 2018 11:10 am
The 1.5% fee is large. Is that a one time fee for helping you plan?

If that fee is an annual percentage of Assets Under Management (AUM), then you should definitely not go with that advisor. An annual fee that large literally kills your long-term returns.

Do you have a desired asset allocation (stock/bond mix, domestic/international stock mix) that you want to aim for?

What is your tax bracket, both federal and state?

You can 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. Please use the link provided by PFInterest for format.
Thank you, @ruralavalon. The fee I was referring to was an AMU. As for a desired asset allocation, for the 80K, I would consider that for an investment I wouldn’t want to touch for 20-30 years, so I would like it to be aggressive. Do you have a suggestion for how I should allocate that? I updated my original post to give a clearer overview of the funds I’m currently contributing to. I also have 60K that I would want to invest more conservatively.

PFInterest wrote:
Sun Sep 09, 2018 10:53 am
unyc wrote:
Sun Sep 09, 2018 10:17 am
One advisor I spoke to has a fee of 1.5%. I liked her plan
the only thing you need to do....is not that.

also please update your post w/ this info: viewtopic.php?t=6212
Thank you, @PFInterest. I’ve updated my original post with the info you suggested. Do you have any other advice you could offer regarding how I could invest savings - 80k in long term, 60k for short term?

Thank you!

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ruralavalon
Posts: 13962
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Looking for help investing 140k savings

Post by ruralavalon » Sun Sep 23, 2018 1:55 pm

unyc wrote:
Sun Sep 09, 2018 10:17 am
. . . . .
Tax Rate: 20% Federal, 6.4% State
Weekly Income: $3090
Current Take Home: $1850
Of Take Home, save about $1000/week.
State of Residence: NJ
State of work: NY
35 years old
Single, rent apartment, no debt
. . . . .
Age: 35
Desired Asset allocation: ? (need advice)
Desired International allocation: ? (need advice)
At age 35, for long-term/retirement investing, I suggest about 20 - 25% in bonds. This is expected to substantially reduce portfolio volatility (risk), with only a relatively slight decrease in portfolio return. Graph, "An Efficient Frontier: the power of diversification". Please see the wiki articles Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk", and "Asset allocation".

I suggest around 20 - 30% of stocks in international stocks. Vanguard paper (March 2012), "Considerations for investing in non-U.S. equities". Historically, allocating 20% of an equity portfolio to non-U.S. stocks would have captured about 84% of the maximum possible diversification benefit, and allocating 30% of an equity portfolio to non-U.S. stocks would have captured about 99% of the maximum possible diversification benefit (p. 6). (You can find lots of debate here on international allocation, opinions ranging all the way from 00% to 50% of stocks in international stocks. If you want more viewpoints on international stocks please try the Google search box (upper right, this page).

For long-term/retirement investing that works out to about 20% bonds, 20% international stocks, and 60% domestic stocks. Asset allocation is a very personal decision. You must decide on an allocation that is comfortable for you based on your own ability, willingness and need to take risk.



unyc wrote:
Sun Sep 09, 2018 10:17 am
I'm looking to invest more of my savings and would love to hear any opinions and recommendations on anything from specific funds I should invest in to how you would personally change things if you were in my shoes. . . .
. . . . .

Current retirement assets
[Taxable
25% $80,000 cash (would like to invest)

401k
27% $89,300
Vanguard Target 2050 (VFIFX) (0.15%)
Current Employee contribution: 5%
Company match: 3.5%

Company Stock ESPP
2% $7,203
I have not continued buying this and don't pay attention to it.

Roth IRA at Vanguard
5% $16,190
Vanguard LifeStrategy Growth Fund 2050 (VFIFX) (0.15%)

Mutual Fund at Vanguard
5% $15,000
VASGX Vanguard LifeStrategy Growth Fund (VASGX) (0.14)
Continuing Contribution $50/week or $2,600/year


Contributions

New annual Contributions
$8,040 to 401k (3.5% employer matching = $5,600/year)
$2,600 taxable VASGX (for retirement)
(income has been to high for additional Roth IRA contribution)

Available funds:
Funds available in 401(k):
Vanguard Target 2050 (VFIFX) (0.15%) $89,300
We still need to know the other funds offered in your 401k. Please give fund names, tickers and expense ratios. We can't give "any opinions and recommendations on . . . specific funds [you] should invest in" without knowing what the available choices are. Again please just add this to your original post using the edit button.

It is often better coordinate investments across all accounts, in other words treat all accounts together as a single unified portfolio, rather than view each account separately.

In the taxable account I suggest using very tax-efficient stock index funds. Wiki article "Tax-efficient fund placement". Examples include Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) ER 0.04% and Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%. Both are very tax-efficient. Those funds are also well suited to any type of account. Both are very diversified with very low expense ratios.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

unyc
Posts: 6
Joined: Sun Sep 09, 2018 9:47 am

Re: Looking for help investing 140k savings

Post by unyc » Thu Sep 27, 2018 4:27 pm

ruralavalon wrote:
Sun Sep 23, 2018 1:55 pm

We still need to know the other funds offered in your 401k. Please give fund names, tickers and expense ratios. We can't give "any opinions and recommendations on . . . specific funds [you] should invest in" without knowing what the available choices are. Again please just add this to your original post using the edit button.
Thank you, @ruralavalon.

I've updated and cleaned up my original post with the 401k fund information. Thank you for the information and links in your last post. I am still going through those.

Thegame14
Posts: 267
Joined: Mon May 07, 2018 11:53 am

Re: Looking for help investing 140k savings

Post by Thegame14 » Thu Sep 27, 2018 4:56 pm

definitely NOT pay anyone 1.5% of AUM, also 60K earmarked for a house, which will earn about 2% or barely inflation, and you think that is going to get you 20% on a house in NJ, which you probably will want to be near NYC or the NYC commuting line, you need more like $100K to put down 20% for a house in this area.....

Looks like maxing the 401K is recent since balance is low for a 35 year old with that salary.

But your income is very good now, so take advantage as best you can before buying a house, keep maxing the 401K, then max an IRA if you can, you are probably close to the income limit, then get the housing fund and investments higher Id say like 50/50 to each with the extra each month, the housing fund in MM like Ally the investment in three fund portfolio. 60/20/20 US stocks, Int'l stocks, Bonds

dkb140
Posts: 61
Joined: Mon May 21, 2018 3:30 pm

Re: Looking for help investing 140k savings

Post by dkb140 » Thu Sep 27, 2018 4:58 pm

unyc wrote:
Sun Sep 09, 2018 10:17 am
Questions:

Long Term
1. How would you invest $80,000 of savings for long term?

Short Term
3. How would you invest $60,000 for a short term 5-10 year goal of purchasing a home?
First, I agree with the others and would run away from the 1.5% Adviser. You can find everything you need on this forum but if you would prefer to work with an adviser, find a fiduciary adviser who charges a flat fee for advice only. Do NOT pay a percentage of your assets.

1. I would try to get the $80k into your Retirement accounts by maxing out your contributions:
a. Max out 401k @ $18,500
b. Max out backdoor Roth contribution. @ $5500 (or tIRA if you prefer).
c. If possible, Max out Mega Backdoor Roth @ ($55k - $18.5k - $5.6k = $30,900)

3. If you plan to buy sooner than later I would look at one of the online 2.25% High Yield Savings accounts. If you plan to buy closer to 10 years then I'd look at 3-4% CDs or a 3 fund portfolio in the taxable account depending on your risk tolerance.

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ruralavalon
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Location: Illinois

Re: Looking for help investing 140k savings

Post by ruralavalon » Fri Sep 28, 2018 8:04 am

Funds for 5-10 year horizon.
unyc wrote:
Sun Sep 09, 2018 10:17 am
Income: $170,000
Emergency funds: $60,000 (18% of Net Worth)
. . . . .
Tax Rate: 20% Federal, 6.4% State
State of Residence: NJ
State of work: NY
. . . . .
Short Term
3. How would you invest $60,000 for a short term 5-10 year goal of purchasing a home?
Fund selection for a 5-10 year goal of purchasing a home involves very different issues than long-term investing, so I will address that in a separate post to avoid confusing the issues.

In the meantime it may be a good idea to get a better handle on your tax rate. There is no federal 20% tax bracket.

Here are calculators you can use to estimate your federal tax bracket. First estimate your "taxable income". money chimp, "Tax Calculator". Then use your "taxable income" to estimate your "tax bracket". Moneychimp, "Federal Tax Brackets".



Asset allocation, long-term/retirement investing.
unyc wrote:
Sun Sep 09, 2018 10:17 am
Debt: No debt/rent apartment
Tax Filing Status: single, no children
. . . . .
Age: 35
Desired Asset allocation: (researching this, but aggressive for my long term investment)
Desired International allocation: (researching this)
. . . . . .
Long Term
1. How would you invest $80,000 of savings for long term?
As mentioned before for long-term/retirement investing at age 35 I suggest about 20 - 25% in bonds. I suggest around 20 - 30% of stocks in international stocks.

For long-term/retirement investing that works out to about 20% bonds, 20% international stocks, and 60% domestic stocks. Asset allocation is a very personal decision. You must decide on an allocation that is comfortable for you based on your own ability, willingness and need to take risk.


Fund selection and placement, long-term/retirement investing.
In selecting funds strive for a combination of broad diversification (to reduce risk) and low expense ratios (to increase your net gain). To simply and easily achieve those two goals I suggest choosing funds to simulate the very well diversified, low expense ratio "three-fund portfolio". Wiki article "Three-fund portfolio". Forum discussion, "The Three-Fund Portfolio".

It is often better coordinate investments across all accounts, in other words treat all accounts together as a single unified portfolio, rather than view each account separately. Select just one or two of the better funds (most diversified + lower expense ratio) in the work-based account (401k, 403b, 457, TSP etc.), where the choices offered are limited. Then complete the rest of the asset allocation using the nearly unlimited fund choices available in a taxable account or any IRAs. This approach lets you avoid having to use sub-par funds often found in work-based accounts like 401ks. Don’t try to put all components of the asset allocation in every account.


unyc wrote:
Sun Sep 09, 2018 10:17 am
Available funds:
TARGET DATE FUNDS
VANGUARD TARGET 2015 (VTXVX) 0.13%
VANGUARD TARGET 2020 (VTWNX) 0.13%
VANGUARD TARGET 2025 (VTTVX) 0.14%
VANGUARD TARGET 2030 (VTHRX) 0.14%
VANGUARD TARGET 2035 (VTTHX) 0.14%
VANGUARD TARGET 2040 (VFORX) 0.15%
VANGUARD TARGET 2045 (VTIVX) 0.15%
VANGUARD TARGET 2050 (VFIFX) 0.15%
VANGUARD TARGET 2055 (VFFVX) 0.15%
VANGUARD TARGET 2060 (VTTSX) 0.15%
VANGUARD TARGET 2065 (VLXVX) 0.15%


PASSIVELY MANAGED INDEX OPTIONS
FID 500 INDEX IPR (FXAIX) 0.015%
VANG SM CP IDX IS PL (VSCPX) 0.03%
FID GLB XUS IDX IPR (FSGGX) 0.06%
MELLON AGGR BD (MPBFX) 0.56%

ACTIVELY MANAGED OPTIONS
(investments provided by my plan sponsor)
LARGE CAP STOCK FUND 0.45%
SMALL MID CAP STOCK 0.68%
INTERNATIONAL FUND 0.56%
GLOBAL FIXED INCOME 0.56% Bond Investments
In my opinion the better funds to consider using in your 401k include:
1) Fidelity 500 Index Fund Institutional Premium Class (81% of U.S. stock market) (FXAIX) ER 0.02%;
2) Fidelity Global Ex-U.S Index Fund Institutional Premium Class (larger companies in both developed and emerging markets) (FSGGX) ER 0.06; and
3) BNY Mellon Bond Fund M (actively managed, intermediate-term bonds) (MPBFX) ER 0.56%.


Domestic stocks.
For domestic stocks I suggest using a total stock market index fund where available; otherwise an S&P 500 index fund (lile the Fidelity 500 fund in your 401k) is good enough by itself for domestic stocks. "In a 401(k) plan with limited choices one might very well opt for an S&P 500 index fund to serve as the domestic stock component of a three-fund portfolio." Wiki article, Three-fund portfolio, "Other considerations".

An S&P 500 index fund covers 81% of the U.S. stock market investing in stocks of selected large-cap and mid-cap U.S. companies, and in the 26 years since the creation of the first total stock market index fund the total return of the two types of funds has been almost identical. Morningstar, "growth of $10k" graph, VTSAX vs VFIAX. In the first 10 years the S&P 500 fund did better, in the last 10 years the total market fund did better, and over the 26 years the total market fund gave a little more return (0.11% per year), but at the cost of a little more volatility (risk): nisiprius post, in the forum discussion "Exchanging the S&P 500 for the TSM". See also Allan Roth, CBS Moneywatch, "John C. Bogle on the S&P 500 vs. the Total Stock Market". So it seems that adding a little in mid/small cap stocks trying to mimic the holdings of a total stock market fund has historically made little difference in performance.

If you want to add the Vanguard small-cap fund in your 401k, then an 82/18 mix of S&P 500 and small-cap ill approximate the content of a total stock market index fund. Wiki article, "Approximating total stock market". In my opinion this is not necessary, it is optional if you prefer to do this.


International stocks.
Fidelity Global Ex-U.S Index Fund Institutional Premium Class (FSGGX) ER 0.06% is not a total international tock index fund. It does invest in both developed and emerging markets, but omits stocks of small-cap companies. Morningstar, portfolio tab FSGGX.

I do not feel that skipping international small-caps has been a serious omission. Over the short time (2 years) Fidelity has had both types of international stock index fund (with and without small-cap), the Fidelity funds have had very similar performance. Morningstar, 2 Fidelity funds, "growth of 10k" chart. At Vanguard over the 11 years Vanguard has had both types of international stock index fund (with and without small-cap), they have also had very similar performance.

I suggest that you use Fidelity Global Ex-U.S Index Fund Institutional Premium Class (FSGGX) ER 0.06% in your 401k later if necessary.


Bonds.
BNY Mellon Bond Fund M (MPBFX) ER 0.56% has modest expense ratio, a kind of gray area. It is one of several good intermediate term high credit quality bond funds with a modest expense ratio falling in the gray area, which could be useable in a 401k despite one's preference for a bond index fund with a low expense ratio.

BNY Mellon Bond Fund M (MPBFX) has an average effective duration of 5.6 years, and an average credit quality = A. It is diversified with 26% government bonds, 37% corporate bonds, and 30% securitized. Morningstar, MPBFX.

I suggest that you use BNY Mellon Bond Fund M (MPBFX) ER 0.56% in your 401k.



In the taxable account I suggest using Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) ER 0.04% and Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%. Both are very tax-efficient. Wiki article "Tax-efficient fund placement". Those funds are also well suited to any type of account. Both are very diversified with very low expense ratios.



To make portfolio management and rebalancing easy it is often better to have at least one large tax-advantaged account which contains all three basic asset types (bonds, international stocks, and domestic stocks). Don’t try to put all components of the asset allocation in every account.




Example portfolio.
Here is an example portfolio that you could consider. This is a three-fund type portfolio, modified as necessary to accommodate the fund offerings in your 401k. Current portfolio size = $207.7k. New annual contributions = about $26.2k. The asset allocation is: 20% bonds; 20% international stocks; and 60% domestic stocks. The percentages given are percentages of the total portfolio, not of a given account. The suggestion is to switch both the existing balances and the new contributions to the funds indicated. All percentages and dollar amounts are rounded off, so may not add up exactly. Sometimes I state 00% to indicate funds you might want to add in the future.


Taxable account @ Vanguard (46% of current portfolio; $95k; adds $2.6k/yr = 13% of new annual contributions)
26%, Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) ER 0.04%
20%, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%.

Company Stock ESPP (03% of current portfolio; $7.2k; "I have not continued buying this and don't pay attention to it".)
03%, company stock
(If you can sell without a large tax liability, then you could sell and add to the taxable account @ Vanguard.)

401k (43% of current portfolio; $89.3k; adds $18k + $5.6k employer match = $23.6k/yr total = 87% of new annual contributions)
23%, Fidelity 500 Index Fund Institutional Premium Class (81% of U.S. stock market) (FXAIX) ER 0.02%;
00%, Fidelity Global Ex-U.S Index Fund Institutional Premium Class (larger companies in both developed and emerging markets) (FSGGX) ER 0.06; and
20%, BNY Melon Bond Fund M (actively managed, intermediate-term bonds) (MPBFX) ER 0.56%.
(The maximum employee contribution allowed is $18.5k/yr, so you could increase contributions a little.)

Roth IRA @ Vanguard (08% of current portfolio; $16.2k)
08%, Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) ER 0.04%
(Consider contributions via the backdoor Roth IRA method.)


Rebalancing.
Because the funds will grow at different and unpredictable rates, it may be necessary every few years to rebalance in order to maintain the desired asset allocation. Wiki article, "Rebalancing". You can easily adjust the asset allocation by exchanging between funds inside your 401k.

Avoid exchanging between funds in the taxable account, which can create income tax liability.

. . . . .

I suggest that you read one or two books on general investing. Wiki article, "Books: recommendations and reviews". When I first stated managing my own investments, I found this tutorial very helpful in learning investing terminology/jargon and some of the investing basics. Morningstar, "Investing Classroom". Also take a look at the Boglehead’s wiki, the "getting started" link I give below.

If you have any questions just ask.

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

unyc
Posts: 6
Joined: Sun Sep 09, 2018 9:47 am

Re: Looking for help investing 140k savings

Post by unyc » Sat Oct 06, 2018 4:35 pm

ruralavalon wrote:
Fri Sep 28, 2018 8:04 am
Funds for 5-10 year horizon.
unyc wrote:
Sun Sep 09, 2018 10:17 am
If you have any questions just ask.

I hope that this helps.
@ruralavalon, Thank you so much for this response! It has been invaluable to me. This is how I like to learn - taking a thing that already exists (like the plan you laid out in detail) and figuring out how it works.

I set up a free consultation with another advisor later in October and will present them with a version of this plan. I will reply with more detail as I get closer to putting a plan in to action.

Thank you all!

pkcrafter
Posts: 13067
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Location: CA
Contact:

Re: Looking for help investing 140k savings

Post by pkcrafter » Sat Oct 06, 2018 6:05 pm

unyc wrote:
Sat Oct 06, 2018 4:35 pm

I set up a free consultation with another advisor later in October and will present them with a version of this plan. I will reply with more detail as I get closer to putting a plan in to action.

Thank you all!
Was the first advisor EJ? Who is the second advisor? The second advisor will most likely try to schmooze you, and I would not recommend going, but if you do, be on guard.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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ruralavalon
Posts: 13962
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Location: Illinois

Re: Looking for help investing 140k savings

Post by ruralavalon » Sun Oct 07, 2018 10:36 am

pkcrafter wrote:
Sat Oct 06, 2018 6:05 pm
unyc wrote:
Sat Oct 06, 2018 4:35 pm

I set up a free consultation with another advisor later in October and will present them with a version of this plan. I will reply with more detail as I get closer to putting a plan in to action.

Thank you all!
Was the first advisor EJ? Who is the second advisor? The second advisor will most likely try to schmooze you, and I would not recommend going, but if you do, be on guard.

Paul
I agree.

Who was the first opinion? Who are you seeing for the second opinion? Beware of salespersons masquerading as "advisors".

A "free consultation" can get very expensive, if you wind up getting sold an expensive product or service. A key to successful long-term investing is to keep investing expenses to a minimum.

I am not totally against professional advice. For what it's worth, we used a fee only planner on a fixed fee basis to help us set up our investing plan, which I then managed myself.

Do you want a planner, or someone to manage your investments?

Here is a guide to help in deciding if you want or need an advisor: "The great paradox of using an advisor is that you must know some basics in order to evaluate the advice, and once you do, you also know enough to consider doing your own management." "Chapter 10 – On Your Own or Hire an Advisor". The article lists 10 questions to ask the advisor. Do they advise in planning, or manage investments? Are they a fiduciary? How are they compensated? Do they favor low cost index investing?

1) You could post your financial details on this forum for ideas on investments and financial planning. Please see this for format: "Asking Portfolio Questions".

2) Vanguard offers a low cost Personal Advisory Service, Fidelity and Schwab offer a similar service.

3) Harry Sit, who sometimes posts here, offers a service thru his blog to help people locate an advisor in their locality. "Advice-Only Search and Screening".

4) Two links for finding an advisor:
http://www.napfa.org/consumer/index.asp
http://www.garrettplanningnetwork.com/
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

unyc
Posts: 6
Joined: Sun Sep 09, 2018 9:47 am

Re: Looking for help investing 140k savings

Post by unyc » Sun Oct 07, 2018 10:39 pm

pkcrafter wrote:
Sat Oct 06, 2018 6:05 pm
unyc wrote:
Sat Oct 06, 2018 4:35 pm

I set up a free consultation with another advisor later in October and will present them with a version of this plan. I will reply with more detail as I get closer to putting a plan in to action.

Thank you all!
Was the first advisor EJ? Who is the second advisor? The second advisor will most likely try to schmooze you, and I would not recommend going, but if you do, be on guard.

Paul
I had asked my accountant for a recommendation for an advisor and that was the first person I saw. I found the second advisor by reaching out to multiple local advisors and narrowing down who I would meet with. I mentioned to them that I will only want to work with them for a one time fee.

I will be on guard and take my time when considering them. Thank you, Paul!

dothechex
Posts: 27
Joined: Sat Jan 23, 2016 8:38 pm

Re: Looking for help investing 140k savings

Post by dothechex » Mon Oct 08, 2018 12:32 pm

As a frequent reader (but very infrequent poster!), you could certainly design a robust, low-cost portfolio that is sustainable long-term simply through the suggestions by the excellent forum members here. It rightfully may feel skeptical to adjust your finances from strangers on a forum, but this is no ordinary group of people :happy For example, ruralavalon's post are always fantastic -- you would be hard-pressed to find better advice than what's written in his reply to your initial question. It's low-cost, simple, and provides a lot of excellent reading material as well.

If you haven't come across this already, I'd suggest reading the investment primer "If You Can" by William Bernstein. It's a short read, but lots of great information in there. It's freely available online, see link below:
https://www.etf.com/docs/IfYouCan.pdf

Prior to seeing an advisor (fee-only, acts as a fiduciary, etc.), I'd echo the sentiments of having a basic understanding of general investing principles / concepts. It will make your meeting much more productive. I think you're already in good shape with the information given in this thread to prepare yourself for the meeting.

Regarding your short-term $60k -- since you'll be using that money in a relatively short timeframe, it's best to hold those funds conservatively. A few of the common recommendations are high yield savings accounts (Capital One, Ally, etc.), CDs, and money market funds (can set this up through your taxable account; assuming it's in Vanguard, one option is the Vanguard Federal Money Market Fund). For what it's worth, I keep my own short-term funds in an Ally account. IMO the differences between all these options are not that large, so I'd just pick something that seems simplest / easiest to you. Just my two cents.

From your current portfolio and income, it seems you're in a great position for long-term financial stability. Best of luck to you! :sharebeer

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