Individual Investment - Please help

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Topic Author
fromashes12
Posts: 5
Joined: Thu May 30, 2019 3:32 pm

Individual Investment - Please help

Post by fromashes12 » Tue Jun 11, 2019 8:43 am

Hi All,

I am a 28-year old that will be moving across the country to California at the start of 2020. I currently work as a Federal Account Manager for a large tech business, but I will be leaving this job to pursue another field. I'm just trying to figure out if there's any advice to how to handle my money for an unpredictable future considering my move/ reduced salary.

Current Salary - 47k w/ commission and this can range from 47k - 70k

Debt:

Car - $6,000.00
School Loan - $20,121.25
Credit Card Debt - $0.00

Liquid Assets (Checking/Savings) - $3,816.49 ( 6 - Month Expenses equate to 6-8k)
Stock Market - $7,253.86
Long-term savings - $7,044.59
401k - $9,000.00

1. I currently have some stock in my company that I cashed out and started to solo invest in some companies. I should probably stop this and get an advisor? Any recommendations?

2. Should I move my long-term savings? It is currently receiving a 2.22% interest this can fluctuate. I'm thinking about moving this into a Betterment account.

3. What should I do with my current 401k? Roll it over into a Traditional or Roth IRA?
I will more than likely be making way less money!


- Ashe
Last edited by fromashes12 on Tue Jun 11, 2019 8:55 am, edited 1 time in total.

sjt
Posts: 223
Joined: Fri May 26, 2017 3:03 pm
Location: NC

Re: Individual Investment - Please help

Post by sjt » Tue Jun 11, 2019 8:47 am

1. I currently have some stock in my company that I cashed out and started to solo invest in some companies. I should probably stop this and get an advisor? Any recommendations? You don't need an advisor. Read "If You can" PDF ebook (search google), and the Wiki on this site

2. Should I move my long-term savings? It is currently receiving a 2.22% interest every month but this can fluctuate. I'm thinking about moving this into a Betterment account. This isn't a bad rate. What does Betterment get you?

3. What should I do with my current 401k? Roll it over into a Traditional or Roth IRA? Roll into Traditional IRA.


I will more than likely be making way less money! Usually people make more money in California. It's an expensive state!
"The one who covets is the poorer man, | For he would have that which he never can; | But he who doesn't have and doesn't crave | Is rich, though you may hold him but a knave." - Wife of Bath tale

Valuethinker
Posts: 38210
Joined: Fri May 11, 2007 11:07 am

Re: Individual Investment - Please help

Post by Valuethinker » Tue Jun 11, 2019 8:49 am

fromashes12 wrote:
Tue Jun 11, 2019 8:43 am
Hi All,

I am a 28-year old that will be moving across the country to California at the start of 2020. I currently work as a Federal Account Manager for a large tech business, but I will be leaving this job to pursue another field. I'm just trying to figure out if there's any advice to how to handle my money for an unpredictable future considering my move/ reduced salary.

Current Salary - 47k w/ commission and this can range from 47k - 70k

Debt:

Car - $6,000.00
School Loan - $20,121.25
Credit Card Debt - $0.00

Liquid Assets (Checking/Savings) - $3,816.49 ( 6 - Month Expenses equate to 6-8k)
Stock Market - $7,253.86
Long-term savings - $7,044.59
401k - $9,000.00

1. I currently have some stock in my company that I cashed out and started to solo invest in some companies. I should probably stop this and get an advisor? Any recommendations?
Your best "investment" is probably repaying your student loans. It's a guaranteed after tax return. Depends on the interest rate - repay highest rate borrowings first.

An investment adviser won't help you pick superior stocks. You would be better just holding Vanguard Total Stock Market fund - you don't need an adviser to do that.
2. Should I move my long-term savings? It is currently receiving a 2.22% interest every month but this can fluctuate. I'm thinking about moving this into a Betterment account.
I think you have confused per month and annual returns. 2.22% per month is roughly 30% p.a.
3. What should I do with my current 401k? Roll it over into a Traditional or Roth IRA?
I will more than likely be making way less money!


- Ashe
I am not US based so over to US experts.

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Sandtrap
Posts: 7560
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Individual Investment - Please help

Post by Sandtrap » Tue Jun 11, 2019 8:51 am

fromashes12 wrote:
Tue Jun 11, 2019 8:43 am
Hi All,

I am a 28-year old that will be moving across the country to California at the start of 2020. I currently work as a Federal Account Manager for a large tech business, but I will be leaving this job to pursue another field. I'm just trying to figure out if there's any advice to how to handle my money for an unpredictable future considering my move/ reduced salary.

Current Salary - 47k w/ commission and this can range from 47k - 70k

Debt:

Car - $6,000.00
School Loan - $20,121.25
Credit Card Debt - $0.00

Liquid Assets (Checking/Savings) - $3,816.49 ( 6 - Month Expenses equate to 6-8k)
Stock Market - $7,253.86
Long-term savings - $7,044.59
401k - $9,000.00

1. I currently have some stock in my company that I cashed out and started to solo invest in some companies. I should probably stop this and get an advisor? Any recommendations?

2. Should I move my long-term savings? It is currently receiving a 2.22% interest every month but this can fluctuate. I'm thinking about moving this into a Betterment account.

3. What should I do with my current 401k? Roll it over into a Traditional or Roth IRA?
I will more than likely be making way less money!

- Ashe
1. No. You don't need an advisor (salesman). Cash out and do not "solo invest in anything". Pay off your Car and as much of any higher interest or high monthly payment loan you can. When life is in transition, you do not want monthly payments bogging you down and reducing your life options. Pay off debts while still keeping a hefty amount for transition contingencies. There's a balance here.

2. Your long term savings can become short term transition needs. Higher interest cash accounts is fine. Keep it liquid and accessible and protect the principal. No investing.

3. Leave it alone for now.

4. Prepare for not only "reduced salary" but a period of "no salary".

5. Always have an exit plan on a journey.
Wiki Bogleheads Wiki: Everything You Need to Know

Topic Author
fromashes12
Posts: 5
Joined: Thu May 30, 2019 3:32 pm

Re: Individual Investment - Please help

Post by fromashes12 » Tue Jun 11, 2019 9:01 am

sjt wrote:
Tue Jun 11, 2019 8:47 am
1. I currently have some stock in my company that I cashed out and started to solo invest in some companies. I should probably stop this and get an advisor? Any recommendations? You don't need an advisor. Read "If You can" PDF ebook (search google), and the Wiki on this site

2. Should I move my long-term savings? It is currently receiving a 2.22% interest every month but this can fluctuate. I'm thinking about moving this into a Betterment account. This isn't a bad rate. What does Betterment get you?

3. What should I do with my current 401k? Roll it over into a Traditional or Roth IRA? Roll into Traditional IRA.


I will more than likely be making way less money! Usually people make more money in California. It's an expensive state!
1. I'll look at this pdf... Thanks for the recommendation.

2. I was just gonna do a stock/bond investment with betterment instead of taking the current interest rate that I was receiving. I would try to match it with the market.

3. Makes sense.

The only reason why I said I would be making less is because I will not be pursuing a traditional career/job.

- Devin

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Toons
Posts: 13347
Joined: Fri Nov 21, 2008 10:20 am
Location: Hills of Tennessee

Re: Individual Investment - Please help

Post by Toons » Tue Jun 11, 2019 9:06 am

Doesn't address your question but ,
Food For thought
Car - $6,000.00
School Loan - $20,121.25


Laser like focus.
Eliminate
:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

Flyer24
Posts: 905
Joined: Sun Apr 08, 2018 4:21 pm

Re: Individual Investment - Please help

Post by Flyer24 » Tue Jun 11, 2019 9:13 am

Focus on paying your debts with intensity. You are going to have a tough road moving to California and taking a pay cut. I would really give that some consideration before making the jump. It is an expensive state. What are your goals with the money in long term savings? Use your cash that is not for the emergency fund and pay down your student loan. You don’t need to do taxable investing yet. That comes after you have maxed out your tax advantaged space.
Last edited by Flyer24 on Tue Jun 11, 2019 9:26 am, edited 2 times in total.

sjt
Posts: 223
Joined: Fri May 26, 2017 3:03 pm
Location: NC

Re: Individual Investment - Please help

Post by sjt » Tue Jun 11, 2019 9:15 am

fromashes12 wrote:
Tue Jun 11, 2019 9:01 am

2. I was just gonna do a stock/bond investment with betterment instead of taking the current interest rate that I was receiving. I would try to match it with the market.
Looks like betterment charges a 0.25% fee just to have an account. What does that fee get you compared to investing with a Fidelity / Vanguard / Schwab which doesn't charge this type of fee?
"The one who covets is the poorer man, | For he would have that which he never can; | But he who doesn't have and doesn't crave | Is rich, though you may hold him but a knave." - Wife of Bath tale

pkcrafter
Posts: 13450
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: Individual Investment - Please help

Post by pkcrafter » Tue Jun 11, 2019 9:47 am

fromashes12 wrote:
Tue Jun 11, 2019 8:43 am
Hi All,

I am a 28-year old that will be moving across the country to California at the start of 2020. I currently work as a Federal Account Manager for a large tech business, but I will be leaving this job to pursue another field. I'm just trying to figure out if there's any advice to how to handle my money for an unpredictable future considering my move/ reduced salary.

Welcome to the forum.

Current Salary - 47k w/ commission and this can range from 47k - 70k

Debt:

Car - $6,000.00
School Loan - $20,121.25

What are the interest rates on these?

Liquid Assets (Checking/Savings) - $3,816.49 ( 6 - Month Expenses equate to 6-8k)
Stock Market - $7,253.86
Long-term savings - $7,044.59
401k - $9,000.00

Are expenses going to be this low (6-8k/6months) when you move to CA?
You should have an emergency fund


https://www.bogleheads.org/wiki/Emergency_fund

1. I currently have some stock in my company that I cashed out and started to solo invest in some companies. I should probably stop this and get an advisor? Any recommendations?

Stop investing in individual stocks, then focus on learning how to manage your investing/retirement assets. All the information you need is here.

Getting Started


https://www.bogleheads.org/wiki/Getting_started

Three fund portfolio

viewtopic.php?f=10&t=88005

https://www.bogleheads.org/wiki/Three-fund_portfolio

2. Should I move my long-term savings? It is currently receiving a 2.22% interest this can fluctuate. I'm thinking about moving this into a Betterment account.

Where is your long term savings, 2.22%?

Don't make any moves before you understand some fundamentals and you have developed a plan.

https://www.bogleheads.org/wiki/Video:B ... philosophy

3. What should I do with my current 401k? Roll it over into a Traditional or Roth IRA?
I will more than likely be making way less money!

Are you going to have a 401k at your new job? If so, you might roll the old one there.

https://www.bogleheads.org/wiki/Video:B ... philosophy

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.

Jack FFR1846
Posts: 9503
Joined: Tue Dec 31, 2013 7:05 am

Re: Individual Investment - Please help

Post by Jack FFR1846 » Tue Jun 11, 2019 9:51 am

Look up the J.L. Collins talk at Google last year. Do what he recommends.

Have you looked at the taxes in California? I would expect your expenses are going to be significantly higher there than wherever you are currently.
Bogle: Smart Beta is stupid

quantAndHold
Posts: 3438
Joined: Thu Sep 17, 2015 10:39 pm

Re: Individual Investment - Please help

Post by quantAndHold » Tue Jun 11, 2019 10:00 am

Jack FFR1846 wrote:
Tue Jun 11, 2019 9:51 am
Look up the J.L. Collins talk at Google last year. Do what he recommends.

Have you looked at the taxes in California? I would expect your expenses are going to be significantly higher there than wherever you are currently.
At OP’s income level, taxes will not be the problem. CA state taxes are very progressive.

OP, what will your expenses be? Are you going to be living with parents or something? In large parts of CA, a $47k salary won’t go far.

If this were me, I would leave all of the savings, long term savings, and “stock market” money in a high interest savings account until you get settled in with a job that will pay your living expenses. Then I would put it all towards paying off the car and the student loan, highest interest first. Once the loans are paid off, you can start saving and investing again. At your income level, it will be much easier to cover your expenses and save once you don’t have a bunch of loans hanging over your head.

lakpr
Posts: 1880
Joined: Fri Mar 18, 2011 9:59 am

Re: Individual Investment - Please help

Post by lakpr » Tue Jun 11, 2019 10:31 am

The OP has very little income, comparatively speaking, it may not be a bad idea to roll the 401k into a Roth IRA. He better do this before going to CA though, to save on state taxes. (If the plan is acceptable, that is!)

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Watty
Posts: 16515
Joined: Wed Oct 10, 2007 3:55 pm

Re: Individual Investment - Please help

Post by Watty » Tue Jun 11, 2019 10:38 am

One thing that has not been mentioned is that you need to figure out the mechanics of getting an apartment in California. A couple of things to put on your list;

1) You will likely need the first and last month's rent and a security deposit. That adds up.

2) When you apply for an apartment they will run a credit check. Be sure that you know your credit score and if that will cause any issues.

3) It will likely not make sense to move your furniture so you will likely just have what will fit in your car. You will need to budget to buy at least the basics stuff right away.

4) When you start your new job it will take awhile for you to get your first paycheck. I have had it take almost three weeks to get my first paycheck because I started on the first day of a two week payroll cycle. That was a long three weeks without any pay.

5) You will have all sorts of costs for things like car registration, driver licence, utility deposits, etc. so figure out what those are. There is a limited time (30 days ???) to get your car registered, drivers license, and get California auto insurance.

6) Depending on where you are starting out and going to you may be looking at about a five day drive. The gas, food, and hotels costs will add up so be sure to budget for that. Be sure to know what to expect as far as snow in January especially if you are driving one of the northern routes. Even with a southern route you could still have some snow delays.

Between your debt and all these future moving expenses you don't have enough to be investing the money in stocks in the taxable account right now. I would sell those stocks and pay off the car loan then build up your cash for the rest of the year to be better positioned for the move. I would not pay extra on the student loans now since you will need the funds for the move.

It sounds like an adventure. I have done long distance moves three times for jobs and it will be challenging and lonely at first but it worked out well for me.

lakpr
Posts: 1880
Joined: Fri Mar 18, 2011 9:59 am

Re: Individual Investment - Please help

Post by lakpr » Tue Jun 11, 2019 10:42 am

For what it is worth, look up a Freecycle chapter near where you want to relocate. Many people are looking to reduce landfill; you may get lucky and find someone looking to get rid of their old sofa, old chair, etc. but not necessarily taken with the idea of dumping them in trash.

delamer
Posts: 8163
Joined: Tue Feb 08, 2011 6:13 pm

Re: Individual Investment - Please help

Post by delamer » Tue Jun 11, 2019 11:31 am

Here’s a link to the “If I Can” article referenced earlier: https://www.etf.com/docs/IfYouCan.pdf

Use it as your investing bible, and you’ll do fine.

Good luck.

Topic Author
fromashes12
Posts: 5
Joined: Thu May 30, 2019 3:32 pm

Re: Individual Investment - Please help

Post by fromashes12 » Tue Jun 11, 2019 12:46 pm

pkcrafter wrote:
Tue Jun 11, 2019 9:47 am
fromashes12 wrote:
Tue Jun 11, 2019 8:43 am
Hi All,

I am a 28-year old that will be moving across the country to California at the start of 2020. I currently work as a Federal Account Manager for a large tech business, but I will be leaving this job to pursue another field. I'm just trying to figure out if there's any advice to how to handle my money for an unpredictable future considering my move/ reduced salary.

Welcome to the forum.

Current Salary - 47k w/ commission and this can range from 47k - 70k

Debt:

Car - $6,000.00
School Loan - $20,121.25

What are the interest rates on these?

Liquid Assets (Checking/Savings) - $3,816.49 ( 6 - Month Expenses equate to 6-8k)
Stock Market - $7,253.86
Long-term savings - $7,044.59
401k - $9,000.00

Are expenses going to be this low (6-8k/6months) when you move to CA?
You should have an emergency fund


https://www.bogleheads.org/wiki/Emergency_fund

1. I currently have some stock in my company that I cashed out and started to solo invest in some companies. I should probably stop this and get an advisor? Any recommendations?

Stop investing in individual stocks, then focus on learning how to manage your investing/retirement assets. All the information you need is here.

Getting Started


https://www.bogleheads.org/wiki/Getting_started

Three fund portfolio

viewtopic.php?f=10&t=88005

https://www.bogleheads.org/wiki/Three-fund_portfolio

2. Should I move my long-term savings? It is currently receiving a 2.22% interest this can fluctuate. I'm thinking about moving this into a Betterment account.

Where is your long term savings, 2.22%?

Don't make any moves before you understand some fundamentals and you have developed a plan.

https://www.bogleheads.org/wiki/Video:B ... philosophy

3. What should I do with my current 401k? Roll it over into a Traditional or Roth IRA?
I will more than likely be making way less money!

Are you going to have a 401k at your new job? If so, you might roll the old one there.

https://www.bogleheads.org/wiki/Video:B ... philosophy

Paul

Car Loan Interest rate is - 3.25% ( This will be paid off by the end of the year)
School Loan

1. School Loans (consolidated)
$4,014.59 (3.150%)
$2,154.99 (6.550%)
$4,918.27 (3.610%)
$1,931.76 (3.610%)
$2,412.92 (4.410%)
$3,199.72 (4.410%)
$1,316.01 (4.040%)

2. My expenses are gonna be around $1200 per month but might be a little bit higher or lower. I am gonna pay off my car and pay my car insurance for 12- Month before moving there. I will only have to deal with my rent, school loan, and phone bill at that point.


I would obviously rollover my 401k but I don't know if my next job will have a 401k plan.

- Ashe

Topic Author
fromashes12
Posts: 5
Joined: Thu May 30, 2019 3:32 pm

Re: Individual Investment - Please help

Post by fromashes12 » Tue Jun 11, 2019 12:51 pm

quantAndHold wrote:
Tue Jun 11, 2019 10:00 am
Jack FFR1846 wrote:
Tue Jun 11, 2019 9:51 am
Look up the J.L. Collins talk at Google last year. Do what he recommends.

Have you looked at the taxes in California? I would expect your expenses are going to be significantly higher there than wherever you are currently.
At OP’s income level, taxes will not be the problem. CA state taxes are very progressive.

OP, what will your expenses be? Are you going to be living with parents or something? In large parts of CA, a $47k salary won’t go far.

If this were me, I would leave all of the savings, long term savings, and “stock market” money in a high interest savings account until you get settled in with a job that will pay your living expenses. Then I would put it all towards paying off the car and the student loan, highest interest first. Once the loans are paid off, you can start saving and investing again. At your income level, it will be much easier to cover your expenses and save once you don’t have a bunch of loans hanging over your head.

I will be staying with a friend to get acclimated and be able to properly search for a place to stay. I will more than likely have a roommate. My only expense when I move will be my student loan and phone bill. I will pay my car insurance for 1 - a year before I leave.

- Ashe

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Watty
Posts: 16515
Joined: Wed Oct 10, 2007 3:55 pm

Re: Individual Investment - Please help

Post by Watty » Tue Jun 11, 2019 1:01 pm

fromashes12 wrote:
Tue Jun 11, 2019 12:51 pm
I will pay my car insurance for 1 - a year before I leave.
That will not work because your insurance is based on where you are living now an your insurance company likely has a requirement that you notify them when you move.

Northern Flicker
Posts: 4239
Joined: Fri Apr 10, 2015 12:29 am

Re: Individual Investment - Please help

Post by Northern Flicker » Tue Jun 11, 2019 1:15 pm

Stock Market - $7,253.86
Long-term savings - $7,044.59
401k - $9,000.00
Some questions about whether the long-term savings is that, or maybe more of an emergency fund and/or assets you will need for your move. But when you have a 401K or IRA and a taxable account with assets, they should be combined into, and managed as a single portfolio.
1. I currently have some stock in my company that I cashed out and started to solo invest in some companies. I should probably stop this and get an advisor? Any recommendations?
Only consider an advisor if the fees are .3% per year or less (that is the level of Vanguard advisors). Buying individual stocks takes on the unique risks of individual stocks with no compensation for taking those risks. You can do an internet search on “unsystematic risk” to learn more about it.

A really simple thing you can do would be to roll your 401K over to an IRA at Vanguard and invest it in the LifeStategy Growth Fund, VASGX. This is a complete investment portfolio in a single fund. The fund managers function as de facto advisors which just involves establishing the fixed allocation for the fund and rebalancing regularly to maintain the fund allocation ratios. That is all you need an investment advisor to do.

The amount of your taxable assets that are part of your retirement portfolio could be invested in VTI (Vanguard total stock market index fund).
2. Should I move my long-term savings? It is currently receiving a 2.22% interest this can fluctuate. I'm thinking about moving this into a Betterment account.
The savings account and cash realized from selling individual stock should be split into cash you need to cover short-term needs and emergencies and money to be invested. You need to decide how much cash you need. Some would suggest 3-6 months of living expenses, which would mean all of it. But once you decide, the investment goes to VTI mentioned above. Paying down debt would also be a reasonable choice. The cash stays in a high-yield savings account.

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BL
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Re: Individual Investment - Please help

Post by BL » Tue Jun 11, 2019 1:35 pm

I would not invest in more equities until you are settled into a job and living arrangement. Perhaps you are settled but you don't say so or indicate so. There are often expenses that come up, so keep liquid. The 2+% savings is just fine. Please stop investing in companies! Index funds or balanced funds will serve you well, and may well include the companies you are interested in anyway.

I doubt there is a rush to convert 401k to IRA since you have 9k in it. If they simply send you a check in your name directly, then you need to roll it into an IRA ASAP! Moving to Vanguard IRA is fine as you can get low-ER funds there and no one will suggest more expensive alternatives.

https://www.etf.com/docs/IfYouCan.pdf
is a good summary of some things to consider. It is meant for new investors.

Come back when you are settled into a job and you can get good investment advice with no conflict of interest if you give detailed information in the format suggested in the sticky thread near the top of this category: Asking Portfolio Questions.

Many so-called "advisors" are just glorified salespeople who are looking out for #1 first of all (and that is not you!) Over time, expensive management and/or high-expense Ratio (ER) funds will eat into your potential earnings at an unbelievable rate!

Good luck in your future endeavors.

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