30 Year Old; First Steps into Financial Readiness

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Topic Author
love0050
Posts: 24
Joined: Fri Jan 29, 2021 7:13 pm

30 Year Old; First Steps into Financial Readiness

Post by love0050 »

I’m a 30-year-old Analyst living in the Tampa Bay Area, making $80,000 a year ($66,500 after taxes). I have a spouse and a son (3 years old). I was very fortunate to not be laid off during COVID (when many others were not so fortunate), but took this as an opportunity to become more proactive when it comes to my financial picture. I started investing (outside of my 401-K), reading and generally soaking up as much info as I could when it comes to personal finance. I stumbled upon this blog and have been an avid reader (less frequent poster).

I’m trying to gauge where I’m at, AND if I have a sound plan moving forward. I welcome any input.

Assets: $89,650K (Not including home equity)
Military TSP: $28,000 (separating in less than 1 year, and no longer contributing to it, planning on rolling $6K into my Fidelity Roth IRA, $14,700 into my employer-sponsored Roth 401-K (Between my employer and I, we contribute $4,800 annually to it, so this will make it up to the $19,500 limit). The remaining amount will go into my Traditional Fidelity Brokerage Account (I still need to figure out the taxes, and set that amount aside).
Employer Roth 401-K: $4,000 (I contribute $200 monthly and my employer matches $200. This is the fully match maximum).
Spouses Stock Ownership: $17,000 (she works for Publix and they routinely give their employees stock based on hours worked. There is NOT an option to set this up for DRIP).
Spouses 401-K: $18,000 (she works part-time and contributes 10% of her paycheck with Publix matching 4%).
Personal Fidelity Account: Valued at $8,500 (invested exclusively in VTI).
Fidelity Roth Account: Valued at $5,000 (invested exclusively in VTI).
M-1 Finance: Valued at $1,500 (My “pie” is composed of Tesla (7%), Apple (7%), Amazon (7%), Microsoft (7%), Square (7%), Air B and B (7%), Alibaba, Roblox, Coin Base, Spotify, Pay Pal, Netflix, Beyond Meat, Nio, Fisker, Snapchat, Roku, Palintir and Riot) (Contribute $75 Weekly).
Start Engine: $500 Dollars’ worth of Stock with “Monogram”, a startup company aimed at helping re-define the prosthetic limb community, currently dominated by a handful of companies who haven’t improved a ton in the last two decades.
Cryptocurrency: $850 between Bitcoin, Cardona, Ethereum (contribute $10 Weekly).
Emergency Fund: $4K
Child’s College 529 Account: $2,300

Debt: $10K, (Not including mortgage loan)
Total Combined Credit Card Debt: $6K (currently working on paying this off, $1.5-2K per month).
Car Loan: $4,000 (paying $500 per month, $50 more than required payment).
Home Loan: Initially $140,000 and have $124,000 remaining on a 30-year fixed rate mortgage for a 1,100 Sq. Ft 2 bed, 2 bath home (purchased in 2016). Home is currently valued at $210K per Zillow AND my own real-estate agent. Put in all new stainless-steel kitchen appliances (fridge, range, dishwasher, microwave) in 2020, but needs a new roof (13 years old) (estimate cost to replace is $7K).
No Student Loans

Game Plan:

1.) Pay off Credit Card Debt
2.) Save for 3-6 Months-worth of expenses ($12K-36K)
a. At this point, begin maxing out Roth-IRA contributions ($500 per month)
b. Begin saving for a car (thinking of buying a 6-7-year-old vehicle)
3.) Begin adding to individual brokerage account (VTI only)

Thoughts?
khram
Posts: 220
Joined: Sat Dec 16, 2017 1:36 am

Re: 30 Year Old; First Steps into Financial Readiness

Post by khram »

Make sure you're not paying fees on your weekly crypto investments. The standard fees on $10 probably kill whatever gains you get.

What's the status of your car? You have a loan for it, is it in good shape? Is there a need to save for another car right now?

#1 is definitely to pay off credit cards.

Bigger emergency fund too. $4k is very risky when you have a family, a mortgage, car, credit cards. I don't have kids, but your kid having a 529 almost as big as your EF sounds like the wrong priority when the EF isn't anywhere near full.
lazynovice
Posts: 1837
Joined: Mon Apr 16, 2012 10:48 pm

Re: 30 Year Old; First Steps into Financial Readiness

Post by lazynovice »

I’d say way too much of your financial picture is tied up with your wife’s employer. You are too young to remember Enron and the dangers of that. I’d sell whatever employer stock is vested after taking into account the tax impact of selling.

I think the EF is too small but you need to decide what you are comfortable with.

While you have credit card debt, stop the 529 contributions. Your son is young and you have time on your side assuming you have the current account aggressively invested.

I would stop investing in the M1, Start Engine and Crypto accounts until the credit card debt is paid off. Actually, I’d sell them a pay off the credit cards and car. If I was your wife and you asked me to sell my employer stock, I’d ask you to sell your play money accounts off.

Once you are out of credit card and car debt, have a comfortable emergency fund, then I’d bump up the retirement contributions.
“I didn’t want my sailboat to be in the driveway when I died.” Nomadland
tashnewbie
Posts: 1680
Joined: Thu Apr 23, 2020 12:44 pm

Re: 30 Year Old; First Steps into Financial Readiness

Post by tashnewbie »

I would definitely start with paying off the CC debt.

I would stop 529 investments until you have paid off the CCs and bumped your emergency fund.

As an investing priority, I would max Roth IRAs for each of you each year ($1000/month). I would use Fidelity for those, since you already have one there. In a real crunch, you can use Roth IRA contributions (but not earnings) as a secondary emergency fund, because contributions can be withdrawn at anytime penalty- and tax-free.

I would keep the TSP where it is. TSP fees are low, and it's a really flexible account because you can rollover other 401ks/403bs/etc into it.

I would stop investing in M-1 Finance, Start Engine, and Crypto. I think you have too many accounts. Simplicity is your friend. I don't think you should be dabbling in these accounts, when you have CC debt and a car loan. You should prioritize maxing your tax-advantaged accounts (401ks and Roth IRAs) before doing this sort of speculative investing. And I think you should be maxing your 401ks before you start investing in a taxable brokerage account.

This wiki might be helpful: https://www.bogleheads.org/wiki/Priorit ... nvestments
Topic Author
love0050
Posts: 24
Joined: Fri Jan 29, 2021 7:13 pm

Re: 30 Year Old; First Steps into Financial Readiness

Post by love0050 »

Thanks guys/gals. Makes sense. I appreciate the insight. I’m not sure if I’ll sell off wife’s stock. Publix is very different from Enron — simply put, they’re a customer-service focused grocer and unless they go public, I won’t sell (mind you — we didn’t pay for the stock, it’s given to her in addition to her hourly pay). But good copy on everything else. Thank you for your time!
User avatar
ruralavalon
Posts: 21725
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: 30 Year Old; First Steps into Financial Readiness

Post by ruralavalon »

You are off to a good start, $80k+ in investments at age 30 :)

Some additional information will be useful. Please send my questions below.

Please simply add 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. P!ease try to follow this format: Asking Portfolio Questions.

love0050 wrote: Tue May 04, 2021 12:36 pm I’m a 30-year-old Analyst living in the Tampa Bay Area, making $80,000 a year ($66,500 after taxes). I have a spouse and a son (3 years old). I was very fortunate to not be laid off during COVID (when many others were not so fortunate), but took this as an opportunity to become more proactive when it comes to my financial picture. I started investing (outside of my 401-K), reading and generally soaking up as much info as I could when it comes to personal finance. I stumbled upon this blog and have been an avid reader (less frequent poster).

I’m trying to gauge where I’m at, AND if I have a sound plan moving forward. I welcome any input.

Assets: $89,650K (Not including home equity)


Military TSP: $28,000 (separating in less than 1 year, and no longer contributing to it, planning on rolling $6K into my Fidelity Roth IRA, $14,700 into my employer-sponsored Roth 401-K (Between my employer and I, we contribute $4,800 annually to it, so this will make it up to the $19,500 limit). The remaining amount will go into my Traditional Fidelity Brokerage Account (I still need to figure out the taxes, and set that amount aside).


Employer Roth 401-K: $4,000 (I contribute $200 monthly and my employer matches $200. This is the fully match maximum).


Spouses Stock Ownership: $17,000 (she works for Publix and they routinely give their employees stock based on hours worked. There is NOT an option to set this up for DRIP).

Spouses 401-K: $18,000 (she works part-time and contributes 10% of her paycheck with Publix matching 4%).


Personal Fidelity Account: Valued at $8,500 (invested exclusively in VTI).

Fidelity Roth Account: Valued at $5,000 (invested exclusively in VTI).


M-1 Finance: Valued at $1,500 (My “pie” is composed of Tesla (7%), Apple (7%), Amazon (7%), Microsoft (7%), Square (7%), Air B and B (7%), Alibaba, Roblox, Coin Base, Spotify, Pay Pal, Netflix, Beyond Meat, Nio, Fisker, Snapchat, Roku, Palintir and Riot) (Contribute $75 Weekly).

Start Engine: $500 Dollars’ worth of Stock with “Monogram”, a startup company aimed at helping re-define the prosthetic limb community, currently dominated by a handful of companies who haven’t improved a ton in the last two decades.

Cryptocurrency: $850 between Bitcoin, Cardona, Ethereum (contribute $10 Weekly).

Emergency Fund: $4K
Child’s College 529 Account: $2,300

Debt: $10K, (Not including mortgage loan)
Total Combined Credit Card Debt: $6K (currently working on paying this off, $1.5-2K per month).
Car Loan: $4,000 (paying $500 per month, $50 more than required payment).
Home Loan: Initially $140,000 and have $124,000 remaining on a 30-year fixed rate mortgage for a 1,100 Sq. Ft 2 bed, 2 bath home (purchased in 2016). Home is currently valued at $210K per Zillow AND my own real-estate agent. Put in all new stainless-steel kitchen appliances (fridge, range, dishwasher, microwave) in 2020, but needs a new roof (13 years old) (estimate cost to replace is $7K).
No Student Loans

Game Plan:

1.) Pay off Credit Card Debt
2.) Save for 3-6 Months-worth of expenses ($12K-36K)
a. At this point, begin maxing out Roth-IRA contributions ($500 per month)
b. Begin saving for a car (thinking of buying a 6-7-year-old vehicle)
3.) Begin adding to individual brokerage account (VTI only)

Thoughts?
1) Leave your Thrift Savings Plan (TSP) account where it is, don't rollover. The TSP is about the best plan available anywhere, the funds are very diversified with very low expense ratios. The G Fund is unique, nothing like it is available anywhere else.

What fund(s) do you use in your TSP account?

2) Continue TSP contributions until separation if practical for you.

3) Stop all contributions to M1 ($75/week), and crypto currency ($10k/week), (total = $4.4k annually). Suspend contributions to the 529 account until the credit card is paid off.

What is the interest rate on the credit card debt? What is the interest rate on the car loan?

After all high interest debt is paid off switch that annual $4.4k to additional 401k contributions.

4) Switch from Roth 401k contributions to traditional 401k contributions. For most people traditional 401k contributions will likely be better.

What is your federal tax bracket?


5) Increase contributions to your 401k account. The annual employee maximum is $19.5k. The employer match does not count toward the employee maximum, it's extra. Do not limit yourself to just enough to get the employer match, unless the funds offered are poor or expensive.

What funds are offered in your employer's 401k plan? Please give fund names, tickers and expense ratios.

6) Increase contributions to spouse's 401k account. The Publix 401k plan offers good funds with low expense ratios, therefore there is no reason to contribute less than the annual employee maximum if that is practical for you both.

7) Don't contribute more to your individual brokerage account, unless first making maximum annual contributions to all tax-advantaged accounts (the 401ks and Roth IRAs).

Here is a general priority to follow for funding accounts. Wiki article "Prioritizing Investments" , link.


love0050 wrote: Tue May 04, 2021 2:13 pm Thanks guys/gals. Makes sense. I appreciate the insight. I’m not sure if I’ll sell off wife’s stock. Publix is very different from Enron — simply put, they’re a customer-service focused grocer and unless they go public, I won’t sell (mind you — we didn’t pay for the stock, it’s given to her in addition to her hourly pay). But good copy on everything else. Thank you for your time!
I agree that Publix is a different animal, a sound employee owned company. There is nothing wrong with holding Publix stock, and their 401k is a good plan.
Last edited by ruralavalon on Tue May 04, 2021 4:12 pm, edited 4 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
User avatar
FiveK
Posts: 11773
Joined: Sun Mar 16, 2014 2:43 pm

Re: 30 Year Old; First Steps into Financial Readiness

Post by FiveK »

In addition to the wiki article on prioritizing investments, Investment Order has very similar suggestions and goes into a little more detail on "why" you might (or might not) want to follow that ordering.
lazynovice
Posts: 1837
Joined: Mon Apr 16, 2012 10:48 pm

Re: 30 Year Old; First Steps into Financial Readiness

Post by lazynovice »

love0050 wrote: Tue May 04, 2021 2:13 pm Thanks guys/gals. Makes sense. I appreciate the insight. I’m not sure if I’ll sell off wife’s stock. Publix is very different from Enron — simply put, they’re a customer-service focused grocer and unless they go public, I won’t sell (mind you — we didn’t pay for the stock, it’s given to her in addition to her hourly pay). But good copy on everything else. Thank you for your time!
The issue isn’t whether Publix is Enron. The issue is that almost 20% of your investments are in one company’s stock. And your wife gets her income from that company. If the company hits a rough patch, that’s a big exposure. The fact that the stock is not publicly traded makes it worse. General rule is no more than 5% of your investments should be in one stock.
“I didn’t want my sailboat to be in the driveway when I died.” Nomadland
Topic Author
love0050
Posts: 24
Joined: Fri Jan 29, 2021 7:13 pm

Re: 30 Year Old; First Steps into Financial Readiness

Post by love0050 »

ruralavalon wrote: Tue May 04, 2021 3:48 pm You are off to a good start, $80k+ in investments at age 30 :)

Some additional information will be useful. Please send my questions below.

Please simply add 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. P!ease try to follow this format: Asking Portfolio Questions.

love0050 wrote: Tue May 04, 2021 12:36 pm I’m a 30-year-old Analyst living in the Tampa Bay Area, making $80,000 a year ($66,500 after taxes). I have a spouse and a son (3 years old). I was very fortunate to not be laid off during COVID (when many others were not so fortunate), but took this as an opportunity to become more proactive when it comes to my financial picture. I started investing (outside of my 401-K), reading and generally soaking up as much info as I could when it comes to personal finance. I stumbled upon this blog and have been an avid reader (less frequent poster).

I’m trying to gauge where I’m at, AND if I have a sound plan moving forward. I welcome any input.

Assets: $89,650K (Not including home equity)


Military TSP: $28,000 (separating in less than 1 year, and no longer contributing to it, planning on rolling $6K into my Fidelity Roth IRA, $14,700 into my employer-sponsored Roth 401-K (Between my employer and I, we contribute $4,800 annually to it, so this will make it up to the $19,500 limit). The remaining amount will go into my Traditional Fidelity Brokerage Account (I still need to figure out the taxes, and set that amount aside).


Employer Roth 401-K: $4,000 (I contribute $200 monthly and my employer matches $200. This is the fully match maximum).


Spouses Stock Ownership: $17,000 (she works for Publix and they routinely give their employees stock based on hours worked. There is NOT an option to set this up for DRIP).

Spouses 401-K: $18,000 (she works part-time and contributes 10% of her paycheck with Publix matching 4%).


Personal Fidelity Account: Valued at $8,500 (invested exclusively in VTI).

Fidelity Roth Account: Valued at $5,000 (invested exclusively in VTI).


M-1 Finance: Valued at $1,500 (My “pie” is composed of Tesla (7%), Apple (7%), Amazon (7%), Microsoft (7%), Square (7%), Air B and B (7%), Alibaba, Roblox, Coin Base, Spotify, Pay Pal, Netflix, Beyond Meat, Nio, Fisker, Snapchat, Roku, Palintir and Riot) (Contribute $75 Weekly).

Start Engine: $500 Dollars’ worth of Stock with “Monogram”, a startup company aimed at helping re-define the prosthetic limb community, currently dominated by a handful of companies who haven’t improved a ton in the last two decades.

Cryptocurrency: $850 between Bitcoin, Cardona, Ethereum (contribute $10 Weekly).

Emergency Fund: $4K
Child’s College 529 Account: $2,300

Debt: $10K, (Not including mortgage loan)
Total Combined Credit Card Debt: $6K (currently working on paying this off, $1.5-2K per month).
Car Loan: $4,000 (paying $500 per month, $50 more than required payment).
Home Loan: Initially $140,000 and have $124,000 remaining on a 30-year fixed rate mortgage for a 1,100 Sq. Ft 2 bed, 2 bath home (purchased in 2016). Home is currently valued at $210K per Zillow AND my own real-estate agent. Put in all new stainless-steel kitchen appliances (fridge, range, dishwasher, microwave) in 2020, but needs a new roof (13 years old) (estimate cost to replace is $7K).
No Student Loans

Game Plan:

1.) Pay off Credit Card Debt
2.) Save for 3-6 Months-worth of expenses ($12K-36K)
a. At this point, begin maxing out Roth-IRA contributions ($500 per month)
b. Begin saving for a car (thinking of buying a 6-7-year-old vehicle)
3.) Begin adding to individual brokerage account (VTI only)

Thoughts?
1) Leave your Thrift Savings Plan (TSP) account where it is, don't rollover. The TSP is about the best plan available anywhere, the funds are very diversified with very low expense ratios. The G Fund is unique, nothing like it is available anywhere else.

What fund(s) do you use in your TSP account?

2) Continue TSP contributions until separation if practical for you.

3) Stop all contributions to M1 ($75/week), and crypto currency ($10k/week), (total = $4.4k annually). Suspend contributions to the 529 account until the credit card is paid off.

What is the interest rate on the credit card debt? What is the interest rate on the car loan?

After all high interest debt is paid off switch that annual $4.4k to additional 401k contributions.

4) Switch from Roth 401k contributions to traditional 401k contributions. For most people traditional 401k contributions will likely be better.

What is your federal tax bracket?


5) Increase contributions to your 401k account. The annual employee maximum is $19.5k. The employer match does not count toward the employee maximum, it's extra. Do not limit yourself to just enough to get the employer match, unless the funds offered are poor or expensive.

What funds are offered in your employer's 401k plan? Please give fund names, tickers and expense ratios.

6) Increase contributions to spouse's 401k account. The Publix 401k plan offers good funds with low expense ratios, therefore there is no reason to contribute less than the annual employee maximum if that is practical for you both.

7) Don't contribute more to your individual brokerage account, unless first making maximum annual contributions to all tax-advantaged accounts (the 401ks and Roth IRAs).

Here is a general priority to follow for funding accounts. Wiki article "Prioritizing Investments" , link.


love0050 wrote: Tue May 04, 2021 2:13 pm Thanks guys/gals. Makes sense. I appreciate the insight. I’m not sure if I’ll sell off wife’s stock. Publix is very different from Enron — simply put, they’re a customer-service focused grocer and unless they go public, I won’t sell (mind you — we didn’t pay for the stock, it’s given to her in addition to her hourly pay). But good copy on everything else. Thank you for your time!
I agree that Publix is a different animal, a sound employee owned company. There is nothing wrong with holding Publix stock, and their 401k is a good plan.
1.) My TSP is currently split between 75% Common Stock/10% International Market and 15% G.
2.) Interest Rate on CC is 15%. Car Loan is 3.99%
3.) I’m in the 22% tax bracket.
4.) I will circle back on this. I initially set it up when I started and simply did what the employer would match with John Hancock. Admittedly, this was a poor decision (but I thought I’d be better off just putting money in my own IRA (after Match) and investing in VTI.
5.) I’ll take a look at the prioritized investment link. Just got home and have to fix dinner for little man but thank you so much for your very thoughtful and thorough response. I appreciate all your feedback.
User avatar
TxFrog
Posts: 35
Joined: Mon Mar 01, 2021 8:45 pm

Re: 30 Year Old; First Steps into Financial Readiness

Post by TxFrog »

love0050 wrote: Tue May 04, 2021 2:13 pm Thanks guys/gals. Makes sense. I appreciate the insight. I’m not sure if I’ll sell off wife’s stock. Publix is very different from Enron — simply put, they’re a customer-service focused grocer and unless they go public, I won’t sell (mind you — we didn’t pay for the stock, it’s given to her in addition to her hourly pay). But good copy on everything else. Thank you for your time!
I also echo the same thoughts to halt 529 and brokerage contributions and pay off the CC debt and start building a larger emergency fund.

Also, just because a company is not like Enron doesn't mean they're immune from hitting a rough patch where the company's stock tanks or severely declines. At my last employer, I had the same sentiment - thought they were a "good" company. I was then laid off and the company filed for bankruptcy. Lost all my company stock. I learnt the hard lesson that market doesn't care what you thought about a particular company.
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