I read it a million times to not time the market. Maybe I just need someone to respond to me directly instead of reading it said to someone else, but I'm afraid of putting it in now - even with softer words like "market correction, " it's still scary.
I'm kind of sure I know where I'll put it - a 3 fund Vanguard portfolio, weighed towards stocks. My 401k is mostly stocks and is well funded, which makes my hesitation here really weird. I'm also a bit scared that I don't know how much I should put in a Money Market fund vs. 3 portfolios (which I consider long term) vs. something medium-term (like for the next 6mo, 1yr, 2yr - for things like a new car that I need + baby expenses). I also need to learn more about health insurance accounts - I just have a FSA for now, which adds to the scariness and hesitation.
Am I personalizing it to much? Is the plan put it all in?
Edit: I'll take sandtrap/J's advice; I edited the main post for ease of use:
Combined $180k, including average bonuses
Ages: both 35
Emergency funds: I'll take $10k and ensure it's here - that's more than enough for 6mo for me.
- $230k mortage @ 3.75%
Assets that aren't in the right place
Money Market: $100k (really, $110k, but taking $10k for emergency)
My 401k (18% contribution + 4% match) = $300k total
Fund (Ticker) Expense Ratio % Invested
Vanguard Total Stock Market Index Fund Institutional Plus Shares (VSMPX) 0.02% 54%
Vanguard Total International Stock Index Fund Institutional Plus Shares (VTPSX) 0.02% 35%
Total Bond Market II Index Fund Institutional Shares (VTBNX) 8%
Vanguard Total International Bond Index Fund Institutional Shares (VTIFX) 0.07% 3%
Her 401k (16% contribution + 4% match) = $70k total
Sorry, I can't get to her details right now. It's a target date fund with ~80% stocks/ 20% bonds
Looking at arcticpineapplecorp's comment about an IPS (Investment Policy Statement - https://www.bogleheads.org/wiki/Investm ... _statement), here is some relevant information:
Short Term Goals/Needs
- 1st Child in 7mo
- New Car @ $28k within 1 year
- New Car @ $28k within 3 years
- New furnace + AC within 2 years = $5k
- Frugal and no behavioral patterns in us seem to be changing that
- No plans to buy a bigger house or have more children
- Fund 50% of a state college for 1 child -or- some other 401k/savings
- Plan to retire ~60-65, with $50k after taxes in today's dollars, without social security factored in
- At least one of us would need assisted care for the last few years of life
- My job is very secure, hers is mostly secure
Goals for this post
- Best allocation of the $100k cash and $100k money market to meet the short term goals (with an unknown of the expense of a 1st child) and maximize the value of the rest -- which is to say could be a lot better since cash isn't gaining value - paying off the mortgage or many safe investments are better than what I'm doing.
- Identify my problem/fear/hesitation with moving that money somewhere with more risk (stocks, bonds, etc.) so it maximizes it's value. I'm not sure if the root cause is my lack of knowledge, therefore, plan or me being illogical because it's "my money" making me overly attached. If this is the cause, I hope to resolve it before it also makes me a helicopter parent.
- Start, if not complete, a plan to get my financial plan and literacy to a reasonable level