When should i invest in my taxable account?

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Topic Author
Jimmy21
Posts: 29
Joined: Sun Jan 28, 2018 3:36 pm

When should i invest in my taxable account?

Post by Jimmy21 » Mon Apr 15, 2019 10:23 am

This relates to budgeting more than investing. My income fluctuates and so do my bills.

Ive been trying to get more serious about investing over the last few months. Im trying to get my system set up. Right now, ive got it set up like this: my direct deposit is deposited in to my ally savings account. Bills add up on my wells fargo account (which includes our IRAs). I transfer enough money from ally to wells fargo at the end of the month to pay the bills. The excess cash is left in ally. At what point should i transfer to my taxable account? I know there are many options, but, i guess my question is what do you guys do or what would you do in my position?

I have 3 accounts at ally right now.

15k emergency fund
15k rental emergency fund
General savings/transfers


I usually have say 4k - 5k in bills. One option i see is when my general savings hits 10k, to transfer 5k to my taxable account. I feel like that makes my emergency fund really 35k, when i decided i only need 30k

Another option would be to transfer all excess cash to my taxable after my bills are paid, i feel like id end up having to dip in to the emergency account often, as there would be no buffer

Another option would be to just see my taxable account as another bill and just DCA on a weekly/monthly basis, this makes me nervous as my bills/income fluctuates.

Another option is to quit overthinking it and just transfer when i feel like it. I donf like this option because i feel like id neglect it and not do it



Do you guys have any kind of system you use?

MattE
Posts: 132
Joined: Sun Mar 04, 2012 8:44 pm

Re: When should i inevest in my taxable account?

Post by MattE » Mon Apr 15, 2019 10:39 am

I do a once-a-month sweep after I know the big bills have been paid where I move all of the excess in our checking accounts to Vanguard, leaving a ~$1K buffer in our checking accounts at all times in case something hits off-cycle or unexpectedly.

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camillus
Posts: 584
Joined: Thu Feb 28, 2013 9:55 pm

Re: When should i inevest in my taxable account?

Post by camillus » Mon Apr 15, 2019 10:48 am

Here's maybe the easiest:

direct deposit into checking
bill pay from checking
keep a certain amount in checking for liquidity

transfer from checking to IRAs & Taxable account
transfer from checking to savings account, stop at a certain balance (~30k)

Question: Why have a savings account in the first place? You could either keep your emergency fund in checking or with CDs at your brokerage.

RIDL
Posts: 58
Joined: Wed Jun 11, 2008 10:50 pm

Re: When should i inevest in my taxable account?

Post by RIDL » Mon Apr 15, 2019 10:58 am

I like the first option you listed. Just use whatever numbers work for you regarding investing some and keeping some in your checking account as a buffer. Once you decide on the numbers, stick with them.

kaudrey
Posts: 983
Joined: Fri Nov 22, 2013 2:40 pm

Re: When should i inevest in my taxable account?

Post by kaudrey » Mon Apr 15, 2019 11:48 am

Direct deposits of paycheck goes to checking account.

Every payday, automatic transfer of set amount to money market account.

Once a month, automatic transfer of set amount to brokerage account.

If my bills exceed what is in my checking account, I just transfer some money back from my money market account (for things like sewer repair last month.... :o )

Topic Author
Jimmy21
Posts: 29
Joined: Sun Jan 28, 2018 3:36 pm

Re: When should i inevest in my taxable account?

Post by Jimmy21 » Mon Apr 15, 2019 12:41 pm

camillus wrote:
Mon Apr 15, 2019 10:48 am


Question: Why have a savings account in the first place? You could either keep your emergency fund in checking or with CDs at your brokerage.
Because my checking pays .01% interest and my ally savings pays 2.2%. Probably not a big deal on 5 grand or whatever, but id rather have money build up in my 2.2% account. It also forces me to not be lazy and ignore my finances. If everything happens on wells fargo, i can pay my bills with 2 button pushes and then say "I'll figure out how much to transfer to my other accounts when i get some more time"

blackholescion
Posts: 35
Joined: Fri Mar 22, 2019 6:41 pm

Re: When should i invest in my taxable account?

Post by blackholescion » Mon Apr 15, 2019 4:42 pm

1) Get 401k/457/403 match if any
2) Max IRA/Roth
3) Pay down high interest debt (up to you what this % is)
4) Max 401k/related if funds are good
5) Taxable

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