When did you start investing outside retirement accounts?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
berg
Posts: 465
Joined: Mon Mar 18, 2013 8:43 pm

When did you start investing outside retirement accounts?

Post by berg »

I ask because I think I should be, but I'm not sure. I'm maxing my 401k and my wife contributes 11% to her pension fund. Additionally, we both max out backdoor roths. We own a home with 20% equity and a 3.75% mortgage. I have an emergency fund greater than 6 months.
  • So my question is when did you start and how much do you contribute monthly (% or number) outside of retirement funds?
    Do you invest additionally for retirement?
    Do you keep separate brokerage accounts for different things? For example, maybe a retirement supplemental long term account or a different one if I want to maximize my investments on a five year horizon for a home renovation, new car, etc.
travellight
Posts: 2892
Joined: Tue Aug 12, 2008 5:52 pm
Location: San Diego

Re: When did you start investing outside retirement accounts

Post by travellight »

I have not yet either. I think I would start once all my mortgages are paid off and I have no where else to put my money. I currently max out my retirement accounts with 401K and IRAs.
364
jon-nyc
Posts: 927
Joined: Sun Nov 15, 2009 8:02 am
Location: New York

Re: When did you start investing outside retirement accounts

Post by jon-nyc »

I started around age 30 or so. Maybe a tad sooner. That was the late 90s bull market so lots of young people threw a couple of grand in a brokerage account if they could swing it.

I got serious after the dot-com bust. Was a boglehead by 2002, even though I didn't know who Jack Bogle was.
User avatar
TomatoTomahto
Posts: 17158
Joined: Mon Apr 11, 2011 1:48 pm

Re: When did you start investing outside retirement accounts

Post by TomatoTomahto »

jon-nyc wrote:I started around age 30 or so. Maybe a tad sooner. That was the late 90s bull market so lots of young people threw a couple of grand in a brokerage account if they could swing it.

I got serious after the dot-com bust. Was a boglehead by 2002, even though I didn't know who Jack Bogle was.
Pretty much the same.

We have roughly twice as much in taxable as tax-deferred (and some small Roth amount) because we ran out of tax deferred space but wanted to continue saving/investing.

We don't personally keep separate accounts, with the exception of the kids' accounts, since they will start being cashed in in a few years.

EDITED TO ADD: paid off mortgage first, then added to taxable. How much we save depends on how we're doing. In a bad year it's maybe $25k, in a good year it's $200k.
Last edited by TomatoTomahto on Mon Mar 25, 2013 6:30 am, edited 1 time in total.
I get the FI part but not the RE part of FIRE.
livesoft
Posts: 86079
Joined: Thu Mar 01, 2007 7:00 pm

Re: When did you start investing outside retirement accounts

Post by livesoft »

berg wrote:
  • So my question is when did you start and how much do you contribute monthly (% or number) outside of retirement funds? Age 16. Started saving for my college expenses
    Do you invest additionally for retirement? Yes ... until l semi-retired.
    Do you keep separate brokerage accounts for different things? For example, maybe a retirement supplemental long term account or a different one if I want to maximize my investments on a five year horizon for a home renovation, new car, etc. No. It is one big pot of money.
Wiki This signature message sponsored by sscritic: Learn to fish.
lwfitzge
Posts: 311
Joined: Sun Jun 12, 2011 8:01 am

Re: When did you start investing outside retirement accounts

Post by lwfitzge »

I started about a year after my first job, 1997, near the peak of the dot com era. I did not have a lot of disposable income after maxing 401k and a deductible TIRA (pre-Roth days). I was smart (or lucky) enough to open a Vanguard account because it was located near my home in PA, not because I was yet wise to the word of Bogle, lol. I pretty much used money from yearly bonuses in the early days to build a taxable account which first comprised of mostly stocks in a TD Ameritrade account (yep, dumb and even dumber I own tech stocks like JD Uniphase, lol). After the bust, I wised up. Started to consolidate to Vanguard w mutual funds for my taxable account and sold off stocks and closed my TD account. Within 10yrs, by 2005, you could say I began to manage my overall portfolio in a manner consistent with overall BH philosophy.
User avatar
ruralavalon
Posts: 26353
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: When did you start investing outside retirement accounts

Post by ruralavalon »

When I got my first job after finishing school (1971), and started saving for a house in an ordinary savings account.

First brokerage account beyond the 401k & rollover IRA when I got a large bonus (around 1985), beyond what we could put in the 401k.

We did use seprate accounts for different things. Don't do so now.
Last edited by ruralavalon on Mon Mar 25, 2013 8:03 am, edited 2 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 8:40 am

Re: When did you start investing outside retirement accounts

Post by staythecourse »

Since we know saving is MUCH more important then any other single factor for investing success including asset allocation decisions saving as much as you can should be the goal of every investor. Every investor should be trying to get to the point of saving in taxable accounts.

I find it funny that even though we know how important saving is to success you see 50x more questions on asset allocations then on saving more money. Saving is not sexy, but is more important then ISvalue vs. foreign real estate questions.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
Professor Emeritus
Posts: 2628
Joined: Mon Aug 13, 2012 6:43 am

Re: When did you start investing outside retirement accounts

Post by Professor Emeritus »

ruralavalon wrote:When I got my first job after finishing school (1971), and started saving for a house in an ordinary savings account.

Interesting questions as to whether saving and investing are the same thing. When you pay for an education you are "investing" in human capital.
investing is acquiring "something" in the hope of future return.
Saving is the function of not consuming your income. (yes income is also complex and may include unrealized capital gains)
There are lots of ways to "save" When you buy a house or a car you increase your stock of durable goods.
That can be a form of savings. So are gold earrings (as DW like to point out) I note that only the resale value is saving and the rest is consumed

When I graduated from law school I was deep in debt but had substantial "human capital" The next day
I made the most intelligent "investment" in my life by marrying the right lady.
(Brilliant medical student who desperately needed a cook) Paying down student loans was savings.
Buying our house resulted in substantial wealth creation. Having children was always a race between income and expenses.
I was 37 before I bought a new car or a share of stock. From then till now we have turned the savings crank.
I would also note that I benefited from a change in the tax law. From 2001 I could have a 403b and a 457 and a DB pension all from the same State employer with all with separate tax favored treatments. Including the DB pension our tax favored savings were about 32% of income. I managed to save outside of that our Retirement funds have always been the vast buldk of savings.
Professor Emeritus
Posts: 2628
Joined: Mon Aug 13, 2012 6:43 am

Re: When did you start investing outside retirement accounts

Post by Professor Emeritus »

staythecourse wrote:"saving as much as you can should be the goal of every investor.".
:happy This is simply not true. Saving is for the purpose of consumption. The goal is to maximize consumption over a lifetime. :happy

As one who is just now moving into the decumulation phase, I am enjoying the spending
sscritic
Posts: 21853
Joined: Thu Sep 06, 2007 8:36 am

Re: When did you start investing outside retirement accounts

Post by sscritic »

When I was 5.
avalpert
Posts: 6313
Joined: Sat Mar 22, 2008 4:58 pm

Re: When did you start investing outside retirement accounts

Post by avalpert »

As soon as I had income I that wasn't being spent beyond what I could set aside in my 401k - so basically as soon as I had income. I have a single brokerage account for my taxable investments

Professor Emeritus wrote: There are lots of ways to "save" When you buy a house or a car you increase your stock of durable goods.
That can be a form of savings. So are gold earrings (as DW like to point out) I note that only the resale value is saving and the rest is consumed
That seems like a dangerous perspective - I mean if buy depreciating assets like a Mercedes is saving than what isn't? At least you put the word in quotes.
WHL
Posts: 789
Joined: Mon Dec 10, 2012 1:22 pm

Re: When did you start investing outside retirement accounts

Post by WHL »

I max my 401k, my Roth IRA and my annual i-bond purchase. Last year I put 20k additional into my taxable account as well as a few grand worth of physical silver. This year, I have stepped up the silver purchasing a bit, and have not put any money into the taxable account (though I most likely will later this year).

Savings accounts at ING are definitely split up - checking keeps minimal money, savings holds the bulk, and I have a "new car fund" that gets $750 a month and won't be touched until I have enough to pay cash for my next truck in 3-5 years.

I'm 31, started investing around 18, but it didn't really start to pick up until about 5 years ago. Just began maxing my 401k two years ago. ~200k in total "retirement" assets.
User avatar
Doc
Posts: 10607
Joined: Sat Feb 24, 2007 12:10 pm
Location: Two left turns from Larry

Re: When did you start investing outside retirement accounts

Post by Doc »

livesoft wrote:
berg wrote:
  • So my question is when did you start and how much do you contribute monthly (% or number) outside of retirement funds? Age 16. Started saving for my college expenses
    Do you invest additionally for retirement? Yes ... until l semi-retired.
    Do you keep separate brokerage accounts for different things? For example, maybe a retirement supplemental long term account or a different one if I want to maximize my investments on a five year horizon for a home renovation, new car, etc. No. It is one big pot of money.
Pretty much the same except a little earlier because I needed to buy a truck to earn enough money to save for college.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
Professor Emeritus
Posts: 2628
Joined: Mon Aug 13, 2012 6:43 am

Re: When did you start investing outside retirement accounts

Post by Professor Emeritus »

avalpert wrote:As soon as I had income I that wasn't being spent beyond what I could set aside in my 401k - so basically as soon as I had income. I have a single brokerage account for my taxable investments

Professor Emeritus wrote: There are lots of ways to "save" When you buy a house or a car you increase your stock of durable goods.
That can be a form of savings. So are gold earrings (as DW like to point out) I note that only the resale value is saving and the rest is consumed
That seems like a dangerous perspective - I mean if buy depreciating assets like a Mercedes is saving than what isn't? At least you put the word in quotes.
It's a technical point. The depreciation is consumption but the remainder is still savings. e.g. if you take $50,000 and buy a car that depreciates 5k per year, in the first year you still have 45K of savings in the car i.e. you have an asset worth 45 k. That 45 k is still part of your savings whether it is in the bank or a garage. When you compute the national savings rate you have to add in the value of assets acquired. Even if you borrow 50K to buy the car you still "saved" 45K, as opposed to spending it on a wedding or party.
If you buy gold jewelry in the middle east up to 95% of the cost is the value of the gold. That part is savings or investment
Please do not confuse this with the classic "the mink coat was on sale so I saved $2000" That is not savings at all. The coat as an asset is worth whatever you can sell it for. Most household goods and clothing are worth virtually nothing

Human capital is also more complicated since it has value but cannot be sold as an asset. Tuition is therefore an investment in an illiquid asset (may be good or bad investment)
avalpert
Posts: 6313
Joined: Sat Mar 22, 2008 4:58 pm

Re: When did you start investing outside retirement accounts

Post by avalpert »

Professor Emeritus wrote:
avalpert wrote:As soon as I had income I that wasn't being spent beyond what I could set aside in my 401k - so basically as soon as I had income. I have a single brokerage account for my taxable investments

Professor Emeritus wrote: There are lots of ways to "save" When you buy a house or a car you increase your stock of durable goods.
That can be a form of savings. So are gold earrings (as DW like to point out) I note that only the resale value is saving and the rest is consumed
That seems like a dangerous perspective - I mean if buy depreciating assets like a Mercedes is saving than what isn't? At least you put the word in quotes.
It's a technical point. The depreciation is consumption but the remainder is still savings. e.g. if you take $50,000 and buy a car that depreciates 5k per year, in the first year you still have 45K of savings in the car i.e. you have an asset worth 45 k. That 45 k is still part of your savings whether it is in the bank or a garage. When you compute the national savings rate you have to add in the value of assets acquired. Even if you borrow 50K to buy the car you still "saved" 45K, as opposed to spending it on a wedding or party.
And I think it would be more accurate with regards to how people use the word saving to say it is pre-paid consumption for an asset that retains residual value for some period of time. Your terminology makes it far too easy for someone to justify buying a new Mercedes instead of putting money in their 401k since it is all saving.
User avatar
bottomfisher
Posts: 399
Joined: Fri Jan 04, 2013 8:03 am

Re: When did you start investing outside retirement accounts

Post by bottomfisher »

So my question is when did you start and how much do you contribute monthly (% or number) outside of retirement funds?
Do you invest additionally for retirement?
Do you keep separate brokerage accounts for different things? For example, maybe a retirement supplemental long term account or a different one if I want to maximize my investments on a five year horizon for a home renovation, new car, etc.
I started early at about 18 years old. It was small sums and not regular contributions. I eventually closed the accounts to help fund medical school. I then started investing outside of retirement again toward the end of residency (35 yrs old). The funds in my personal account are earmarked for retirement. But I would considering using them to purchase the practice I'm currently in should that opportunity come available down the road. They could also be utilized as an additional emergency fund should a desperate situation arise. Otherwise, I probably will not dip into them for any other reason. I place a certain amount in them monthly outside of retirement funding. I'm considering decreasing the amount and paying more toward student loans due to current market valuations and lower expectations on my behalf. We also may purchase a newer home sooner or later so I have seperate personal fund Vg Tax Managed Balanced fund earmarked only for that should an opportunity arise sooner or later.
User avatar
White Coat Investor
Posts: 17413
Joined: Fri Mar 02, 2007 8:11 pm
Location: Greatest Snow On Earth

Re: When did you start investing outside retirement accounts

Post by White Coat Investor »

berg wrote:I ask because I think I should be, but I'm not sure. I'm maxing my 401k and my wife contributes 11% to her pension fund. Additionally, we both max out backdoor roths. We own a home with 20% equity and a 3.75% mortgage. I have an emergency fund greater than 6 months.
  • So my question is when did you start and how much do you contribute monthly (% or number) outside of retirement funds?
    Do you invest additionally for retirement?
    Do you keep separate brokerage accounts for different things? For example, maybe a retirement supplemental long term account or a different one if I want to maximize my investments on a five year horizon for a home renovation, new car, etc.
It really comes down to whether you have a non-retirement goal to invest for and whether you can save more than maxing out the accounts.

For example, if you want to save for a kid's college tuition, you don't want to save for that inside retirement accounts.

If all you have available is a 401K as an employee and a single Roth IRA, but you want to save $40K a year, then you'll need to invest outside retirement accounts.

I've gone both ways. I initially did no saving outside a retirement account, then I started wanting to save more than I had space available so I added a taxable account. Then, I became eligible for retirement plans which had higher limits, so I actually ended up using my taxable account for charitable contributions while contributing cash I would have used for that into retirement accounts. I also opened ESAs/529s. My taxable account is pretty minimal right now.

Investing in real estate is another good reason for a taxable account.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
STC
Posts: 415
Joined: Wed Nov 14, 2012 8:22 am

Re: When did you start investing outside retirement accounts

Post by STC »

berg wrote:I ask because I think I should be, but I'm not sure. I'm maxing my 401k and my wife contributes 11% to her pension fund. Additionally, we both max out backdoor roths. We own a home with 20% equity and a 3.75% mortgage. I have an emergency fund greater than 6 months.
  • So my question is when did you start and how much do you contribute monthly (% or number) outside of retirement funds?
    Do you invest additionally for retirement?
    Do you keep separate brokerage accounts for different things? For example, maybe a retirement supplemental long term account or a different one if I want to maximize my investments on a five year horizon for a home renovation, new car, etc.
Congrats on getting to this point! Excellent. However, you are not out of retirement space. There are:

IBonds - $10k per SS number per year + $5k per SS number on a tax refund = $30k
EEBonds - $10k per SS number per year = $20k
Total: $50k

Then there are HSA's & 529's if you are so inclined.

What I do for my wife and I is:
- Max 401k's
- Max Backdoor rIRA's
- Max IBonds (except for the tax return) $20k
- ESPP up to $25k per year (taxable, but get to buy at 15% discount. Sell immediately and move funds to an index)
- Invest in Taxable

I am considering adding EEBonds to my personal list at age 35, to build an annuity starting at 55 through 75. That is still a year and a half away.

edit: Started taxable investing at 18 with $2k. Lost everything. Again at 24 with $4k, again lost everything. Became a boglehead (years before I found this forum) through research and experience, now have a $500k portfolio at 33 and saving rapidly to get to $1m. The most important thing this forum has taught me is what a proper asset allocation really looks like.
icefr
Posts: 613
Joined: Sun Apr 17, 2011 10:50 am

Re: When did you start investing outside retirement accounts

Post by icefr »

I bought an Admiral shares index fund in taxable last year after I bought my condo (TISM). I'd had some small taxable investments prior to that, but I sold them to raise money for the down payment. It was good to do that learning experience will small dollar amounts (low 4 figures).

But now before investing in taxable stock index funds, I will do (and was doing before I bought the initial investment as well):
1) Traditional 401(k) to the max - $17,500
2) Backdoor Roth IRA to the max - $5,500
3) Series I Savings Bonds to the max - $10,000 (I'm not sold on EE bonds yet)
4) Pay down the mortgage

Some people will argue with me against paying down the mortgage, but my plan is to re-evaluate that each year, and for this year, I'm paying down a huge chunk of it with my spare cash flow.
RobInCT
Posts: 396
Joined: Sun Dec 09, 2012 1:58 pm

Re: When did you start investing outside retirement accounts

Post by RobInCT »

Have not yet and will not until the student loans are paid off and own a paid-for house. In my 30s now and have maxed all available retirement space since I was 21. Not sure I will ever make it to taxable, frankly. Individual circumstances vary, but I anticipate a modest COLA pension + social security (to the extent still available), and early retirement is not a goal, so not sure I will have a projected need to save more than 401k + Roth.
letsgobobby
Posts: 12073
Joined: Fri Sep 18, 2009 1:10 am

Re: When did you start investing outside retirement accounts

Post by letsgobobby »

STC wrote:
berg wrote:I ask because I think I should be, but I'm not sure. I'm maxing my 401k and my wife contributes 11% to her pension fund. Additionally, we both max out backdoor roths. We own a home with 20% equity and a 3.75% mortgage. I have an emergency fund greater than 6 months.
  • So my question is when did you start and how much do you contribute monthly (% or number) outside of retirement funds?
    Do you invest additionally for retirement?
    Do you keep separate brokerage accounts for different things? For example, maybe a retirement supplemental long term account or a different one if I want to maximize my investments on a five year horizon for a home renovation, new car, etc.
Congrats on getting to this point! Excellent. However, you are not out of retirement space. There are:

IBonds - $10k per SS number per year + $5k per SS number on a tax refund = $30k
EEBonds - $10k per SS number per year = $20k
Total: $50k

Then there are HSA's & 529's if you are so inclined.

What I do for my wife and I is:
- Max 401k's
- Max Backdoor rIRA's
- Max IBonds (except for the tax return) $20k
- ESPP up to $25k per year (taxable, but get to buy at 15% discount. Sell immediately and move funds to an index)
- Invest in Taxable

I am considering adding EEBonds to my personal list at age 35, to build an annuity starting at 55 through 75. That is still a year and a half away.

edit: Started taxable investing at 18 with $2k. Lost everything. Again at 24 with $4k, again lost everything. Became a boglehead (years before I found this forum) through research and experience, now have a $500k portfolio at 33 and saving rapidly to get to $1m. The most important thing this forum has taught me is what a proper asset allocation really looks like.
I think it is only $5k total per tax return for I bonds.
staythecourse
Posts: 6993
Joined: Mon Jan 03, 2011 8:40 am

Re: When did you start investing outside retirement accounts

Post by staythecourse »

Professor Emeritus wrote:
staythecourse wrote:"saving as much as you can should be the goal of every investor.".
:happy This is simply not true. Saving is for the purpose of consumption. The goal is to maximize consumption over a lifetime. :happy

As one who is just now moving into the decumulation phase, I am enjoying the spending
I would love to see how one is going to "maximize consumption over a lifetime" without saving?? The only answers to that would be: waiting for an inheritance, waiting to hit the lottery, or selling a company to cash out. Otherwise, to deaccumulate one must accumulate first!!

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle
Professor Emeritus
Posts: 2628
Joined: Mon Aug 13, 2012 6:43 am

Re: When did you start investing outside retirement accounts

Post by Professor Emeritus »

staythecourse wrote:
Professor Emeritus wrote:
staythecourse wrote:"saving as much as you can should be the goal of every investor.".
:happy This is simply not true. Saving is for the purpose of consumption. The goal is to maximize consumption over a lifetime. :happy

As one who is just now moving into the decumulation phase, I am enjoying the spending
I would love to see how one is going to "maximize consumption over a lifetime" without saving?? The only answers to that would be: waiting for an inheritance, waiting to hit the lottery, or selling a company to cash out. Otherwise, to deaccumulate one must accumulate first!!

Good luck.
You have to read what I wrote. Saving is the process EARLY in the life cycle. later in the life cycle you are still INVESTING but not SAVING ergo Saving is not the goal of every Investor.

I am an investor but not a saver.
Professor Emeritus
Posts: 2628
Joined: Mon Aug 13, 2012 6:43 am

Re: When did you start investing outside retirement accounts

Post by Professor Emeritus »

avalpert wrote:
Professor Emeritus wrote:
avalpert wrote:As soon as I had income I that wasn't being spent beyond what I could set aside in my 401k - so basically as soon as I had income. I have a single brokerage account for my taxable investments

Professor Emeritus wrote: There are lots of ways to "save" When you buy a house or a car you increase your stock of durable goods.
That can be a form of savings. So are gold earrings (as DW like to point out) I note that only the resale value is saving and the rest is consumed
That seems like a dangerous perspective - I mean if buy depreciating assets like a Mercedes is saving than what isn't? At least you put the word in quotes.
It's a technical point. The depreciation is consumption but the remainder is still savings. e.g. if you take $50,000 and buy a car that depreciates 5k per year, in the first year you still have 45K of savings in the car i.e. you have an asset worth 45 k. That 45 k is still part of your savings whether it is in the bank or a garage. When you compute the national savings rate you have to add in the value of assets acquired. Even if you borrow 50K to buy the car you still "saved" 45K, as opposed to spending it on a wedding or party.
And I think it would be more accurate with regards to how people use the word saving to say it is pre-paid consumption for an asset that retains residual value for some period of time. Your terminology makes it far too easy for someone to justify buying a new Mercedes instead of putting money in their 401k since it is all saving.
your terminology would work for purchases such as a suit. It's a prepaid durable object with no "asset value". But if you buy something you could otherwise rent or lease your asset value is clearly part of your savings. For many years my home equity loan was my savings account. When I had money I paid down the loan. When I needed it (e.g. to buy a car) I borrowed it back. My situation was no different from a renter with a bank account.
rr2
Posts: 1071
Joined: Wed Nov 19, 2008 9:04 pm

Re: When did you start investing outside retirement accounts

Post by rr2 »

We are in our mid-40s. Our tax advantaged space is almost approaching half our gross income. We maximize 2 403bs and 2 Roth IRAs and have generous employer contributions as well. Therefore, there is very little money available to fund taxable accounts and the taxable is less than 2% of our total accumulation.

Recently we received a small raise. Part of the raise is used to make additional mortgage principal payments and part of it goes into a taxable account at Vanguard. Currently, I don't have any plan for it. It is unlikely to grow large enough to enable us to retire early. Maybe there might be enough in it to pay for part of Roth conversion.
letsgobobby
Posts: 12073
Joined: Fri Sep 18, 2009 1:10 am

Re: When did you start investing outside retirement accounts

Post by letsgobobby »

Make sure you consider all your tax deferred options first.

http://www.bogleheads.org/forum/viewtop ... 0&t=109284
2beachcombers
Posts: 672
Joined: Sat Jul 31, 2010 5:10 pm
Location: Savannah

Re: When did you start investing outside retirement accounts

Post by 2beachcombers »

Professor Emeritus wrote:
ruralavalon wrote:When I got my first job after finishing school (1971), and started saving for a house in an ordinary savings account.

Interesting questions as to whether saving and investing are the same thing. When you pay for an education you are "investing" in human capital.
investing is acquiring "something" in the hope of future return.
Saving is the function of not consuming your income. (yes income is also complex and may include unrealized capital gains)
There are lots of ways to "save" When you buy a house or a car you increase your stock of durable goods.
That can be a form of savings. So are gold earrings (as DW like to point out) I note that only the resale value is saving and the rest is consumed

When I graduated from law school I was deep in debt but had substantial "human capital" The next day
I made the most intelligent "investment" in my life by marrying the right lady.
(Brilliant medical student who desperately needed a cook) Paying down student loans was savings.
Buying our house resulted in substantial wealth creation. Having children was always a race between income and expenses.
I was 37 before I bought a new car or a share of stock. From then till now we have turned the savings crank.
I would also note that I benefited from a change in the tax law. From 2001 I could have a 403b and a 457 and a DB pension all from the same State employer with all with separate tax favored treatments. Including the DB pension our tax favored savings were about 32% of income. I managed to save outside of that our Retirement funds have always been the vast buldk of savings.
+1--except I was the one needing a cook

Paid off student loans, bought and improved 6 homes over 40ys, kids hockey skates and horseshoes for 20 yrs,
Maxed tax deferred(100% equities for 40 yrs) and company stock purchases(little growing company named IBM)
Moved out of high tax state to ZERO tax state.
Minor taxable savings up to 55 yrs old-- until sale of home(4x profit) and downsized in 2000 and cashed in Stock Options when I retired.
Paid off all debt, morgage, cars etc.

jerry
User avatar
Dale_G
Posts: 3466
Joined: Tue Feb 20, 2007 4:43 pm
Location: Central Florida - on the grown up side of 85

Re: When did you start investing outside retirement accounts

Post by Dale_G »

1962 - before there were any tax deferred "retirement" accounts.

Some call them the "good old days", others recall, "walking 4 miles to school in the driving snow". There is some truth to each, but tax deferred investment possibilities are definitely an improvement.

Starting over, in today's environment, I would still opt to keep 10%-20% of investments in a taxable account. It is an almost zero hassle way of having funds available when you want them.

Dale
Volatility is my friend
azanon
Posts: 3142
Joined: Mon Nov 07, 2011 9:34 am

Re: When did you start investing outside retirement accounts

Post by azanon »

berg wrote:I ask because I think I should be, but I'm not sure. I'm maxing my 401k and my wife contributes 11% to her pension fund. Additionally, we both max out backdoor roths. We own a home with 20% equity and a 3.75% mortgage. I have an emergency fund greater than 6 months.
  • So my question is when did you start and how much do you contribute monthly (% or number) outside of retirement funds?
    Do you invest additionally for retirement?
    Do you keep separate brokerage accounts for different things? For example, maybe a retirement supplemental long term account or a different one if I want to maximize my investments on a five year horizon for a home renovation, new car, etc.
Interesting question because it is one I've recently had to address.

I would suggest (using hindsight) for younger investors to max all tax advantaged accounts up until the point that the estimated growth of those accounts, unfunded from that point forward, could support you from 62 to the end of your life. THEN, as a contingency, I would suggest switching the lion's share of your savings to non-tax advantaged savings to increase the likelihood that you'd be able to retire early should you need or want to do so (with the exception of matching funds from a 401(k) plan, or Roths because you can access Roth contributions tax free anyway). Say you wanted, or needed, to retire at 50? You're going to need some savings that you can access penalty free. There are 72(t) distributions that you can set up for early withdrawals from tax-advantaged plans, but the payout rate for those are very low (say 1.4% ish of the total balance).

But in my late 20s, and 30s, I did have a catch-all, non-retirement, car/new roof/huge purchase fund that I funded so that I would be able to pay cash for those things instead of needing to finance. Since that stuff was very infrequent, I found one fund for all of it did the trick. I tended to buck convention with that fund and used an equity fund. I admit being persuaded quite a bit by Jeremy Siegel that stocks become quite stable when viewed from as low as a 3 year or greater perspective. In actual experience, I found that to be true (even in the last decade if you can believe that).
Last edited by azanon on Tue Mar 26, 2013 9:05 pm, edited 1 time in total.
User avatar
pennstater2005
Posts: 2509
Joined: Wed Apr 11, 2012 8:50 pm

Re: When did you start investing outside retirement accounts

Post by pennstater2005 »

Haven't gotten there yet. Someday 8-)
“If you think nobody cares if you're alive, try missing a couple of car payments.” – Earl Wilson
User avatar
Toons
Posts: 14467
Joined: Fri Nov 21, 2008 9:20 am
Location: Hills of Tennessee

Re: When did you start investing outside retirement accounts

Post by Toons »

33 years ago :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
Post Reply