Am I doing this right?

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varoma
Posts: 8
Joined: Wed Jan 10, 2018 11:58 pm

Am I doing this right?

Post by varoma » Thu Jan 11, 2018 12:45 am

*Edited based on feedback to facilitate comments*

I'm almost 38, filling this year for the first time as married in CA.
Tax bracket 24% starting 2018.

Regular bank account: $57k
Roth IRA had it for 1.5 years: $11k, contributing $5.5k/year.
IEFA (ISHARES Tr/CORE MSCI EAFE ETF) 8.04%
IJH (iShares Core S&P Mid Cap ETF) 8.89%
IVV (iShares S&P 500 Index (ETF) 7.65%
SCHG (Schwab U S Large Cap Growth ETF) 4.66%
SCHH (SCHWAB STRATEGI/US REIT ETF) 3.33%
VGT (Vanguard Information Technology ETF) 7.87%
VOO (Vanguard 500 Index Fund) 46.49%
VOOG (VANGUARD ADMIRA/S&P 500 GR IX FD ETF) 13.05%

401(k) had it for 2.5 years: $44k including matching from employer.
100% allocated in FUSEX (Fidelity® 500 Index Fund Investor Class)

Emergency Savings for 2 years at high yield online bank account (1.43% APY): $16k

I would like to know what should I do with both my Roth IRA and 401k holdings. Also, what is the best way to invest my $57k and still have liquidity. I'm ok with investing on bonds for say a year about $20k but not sure what product would be better (taxes, etc): traditional IRA or regular brokerage account?

Thanks in advance for all your help!
Last edited by varoma on Sat Jan 13, 2018 7:53 pm, edited 3 times in total.

mhalley
Posts: 6058
Joined: Tue Nov 20, 2007 6:02 am

Re: Am I doing this right?

Post by mhalley » Thu Jan 11, 2018 3:36 am

You might get a better response if you include the names of the ETFs and break them down by % instead of dollar amount. In addition, if you include your 401k funds that are available in this format you will get a better answer.

viewtopic.php?t=6212

How you invest money in taxable depends on when you need to spend the money. If needed within 5 years it should be saved is a cd ladder, or a high yield savings account. Doughroller has some other suggestions for short term goals here.
https://www.doughroller.net/investing/t ... vestments/

varoma
Posts: 8
Joined: Wed Jan 10, 2018 11:58 pm

Re: Am I doing this right?

Post by varoma » Thu Jan 11, 2018 5:28 pm

Thanks @mhalley for your response!

I have edited my initial post based on your feedback.
Follow up question:
-Does it make sense to invest $20k of $57k (or whatever other amount) in bonds or is it better in a CD?
-How does the CD ladder works?

delamer
Posts: 6107
Joined: Tue Feb 08, 2011 6:13 pm

Re: Am I doing this right?

Post by delamer » Thu Jan 11, 2018 5:35 pm

varoma wrote:
Thu Jan 11, 2018 5:28 pm
Thanks @mhalley for your response!

I have edited my initial post based on your feedback.
Follow up question:
-Does it make sense to invest $20k of $57k (or whatever other amount) in bonds or is it better in a CD?
-How does the CD ladder works?
Add the full names of your investments; people do not know ticker symbols.

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ray.james
Posts: 1022
Joined: Tue Jul 19, 2011 4:08 am

Re: Am I doing this right?

Post by ray.james » Thu Jan 11, 2018 5:36 pm

Varoma, welcome to the forum.

A few pertinent question that others might ask you for giving replies. Your marginal tax rate.

Is your emergency fund sufficient? When people say 6 months, it is 6 months total expenses. is 16k enough with your new married situation?

Is your roth divided across 7 funds? You can simplify that to 1/2 funds.

Is 57k meant for future home purchase or part of emergency fund/cash flow? If it is meant for short term goals, you can choose a bond fund/high yield savings combo.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939

varoma
Posts: 8
Joined: Wed Jan 10, 2018 11:58 pm

Re: Am I doing this right?

Post by varoma » Sat Jan 13, 2018 7:49 pm

Thanks for your reply, ray.james! Also thank you mhalley for the links!

I edited my initial post to add my marginal tax rate as you suggested.
Regarding the emergency fund, it is still not sufficient to cover 6 months total expenses, but I'm working on it.

Regarding your comment on my roth, which would you keep/sell?

The $57k is currently just sitting and has helped as main savings but clearly it has been sitting for way too long and I'm interested in making it grow for a possible future home purchase. Most importantly, I just don't want to leave it at a regular savings bank account receiving a mere 0.035% or such low interest. Also, I would like to have a good level of liquidity in case an emergency happens, not interested in paying high early withdrawal fees or taxes.
So, in summary would like some advice into how I can invest say, $30k of those $57k in a short term (<5 years) plan.

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