Small business owner new to Bogleheading

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rudeboy
Posts: 2
Joined: Thu Oct 05, 2017 9:21 pm

Small business owner new to Bogleheading

Post by rudeboy » Thu Oct 05, 2017 9:30 pm

Hey all,

I am trying to develop a financial plan for myself. I am 32 years old, single, started a small business two years ago, which caused a pretty big disruption in my savings. I feel like I am behind :shock: .

Currently have an 18k emergency fund and 15k in Roth/Traditional IRAs. No debt.

Income for the year is looking to be about 50k.

I have maxed out my IRAs for 2017and am wanting to buy some more S&P 500 in a taxable account, as opposed to opening a solo 401k or some other retirement account available to the self-employed, because I *might* want to buy a house in the next few years. Is this advisable?

learning_head
Posts: 813
Joined: Sat Apr 10, 2010 6:02 pm

Re: Small business owner new to Bogleheading

Post by learning_head » Thu Oct 05, 2017 10:35 pm

Money earmarked to be used in the next few years should not be in the stock market. Only funds that you don't plan on using for at least 10 years should be in the stock market.

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Sandtrap
Posts: 2790
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳

Re: Small business owner new to Bogleheading

Post by Sandtrap » Thu Oct 05, 2017 10:38 pm

Take into account your business plan when developing your personal financial plan . . .and vs vs.
They are interdependent at this point.

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ruralavalon
Posts: 11907
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Small business owner new to Bogleheading

Post by ruralavalon » Fri Oct 06, 2017 5:14 pm

Welcome to the forum :) .
rudeboy wrote:
Thu Oct 05, 2017 9:30 pm
Hey all,

I am trying to develop a financial plan for myself. I am 32 years old, single, started a small business two years ago, which caused a pretty big disruption in my savings. I feel like I am behind :shock: .

Currently have an 18k emergency fund and 15k in Roth/Traditional IRAs. No debt.

Income for the year is looking to be about 50k.

I have maxed out my IRAs for 2017and am wanting to buy some more S&P 500 in a taxable account, as opposed to opening a solo 401k or some other retirement account available to the self-employed, because I *might* want to buy a house in the next few years. Is this advisable?
That sounds fairly reasonable, open a taxable account and invest according to your probable needs. The key will be your word "might". How certain is your house purchase in a few years.?

If your need for the money is indefinite, then invest "as if" for the long-term or retirement. That could be in a very diversified stock index fund. My suggestion would be Vanguard Total Stock Market Index Fund, rather than the Vanguard 500 Index Fund. The total stock market index fund is a little more diversified, it covers stocks ofboth larger and smaller us companies, but the S&P 500 Fund covers only stocks of larger U.S. companies.

If you will probably be buying a house in a few years then invest in something less risky that a stock fund. You could consider Vanguard Balanced Index Fund, Vanguard LifeStrategy Conservative Growth Fund, or a Vanguard short-term or intermediate-term bond fund, or short-term federally insured CDs.
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rudeboy
Posts: 2
Joined: Thu Oct 05, 2017 9:21 pm

Re: Small business owner new to Bogleheading

Post by rudeboy » Fri Oct 06, 2017 9:10 pm

ruralavalon wrote:
Fri Oct 06, 2017 5:14 pm
Welcome to the forum :) .
rudeboy wrote:
Thu Oct 05, 2017 9:30 pm
Hey all,

I am trying to develop a financial plan for myself. I am 32 years old, single, started a small business two years ago, which caused a pretty big disruption in my savings. I feel like I am behind :shock: .

Currently have an 18k emergency fund and 15k in Roth/Traditional IRAs. No debt.

Income for the year is looking to be about 50k.

I have maxed out my IRAs for 2017and am wanting to buy some more S&P 500 in a taxable account, as opposed to opening a solo 401k or some other retirement account available to the self-employed, because I *might* want to buy a house in the next few years. Is this advisable?
That sounds fairly reasonable, open a taxable account and invest according to your probable needs. The key will be your word "might". How certain is your house purchase in a few years.?

If your need for the money is indefinite, then invest "as if" for the long-term or retirement. That could be in a very diversified stock index fund. My suggestion would be Vanguard Total Stock Market Index Fund, rather than the Vanguard 500 Index Fund. The total stock market index fund is a little more diversified, it covers stocks ofboth larger and smaller us companies, but the S&P 500 Fund covers only stocks of larger U.S. companies.

If you will probably be buying a house in a few years then invest in something less risky that a stock fund. You could consider Vanguard Balanced Index Fund, Vanguard LifeStrategy Conservative Growth Fund, or a Vanguard short-term or intermediate-term bond fund, or short-term federally insured CDs.

Thanks rural. My house purchase is not at all certain. I'm about 50//50 as to whether I even want to be a homeowner, especially as a single man. But that might change if I settle down, you know? So I guess my dilemma is whether to keep money out of the markets just in case I decide I do want to buy a home in the next 5 years or so.

With the small business, there are some opportunities to grow that would involve maybe $10k up front, but, again, I'm not sure if I want to pursue those opportunities either. I guess I'm just indecisive all around :confused

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