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Net Worth at the end of 2015 was $630k, which means we added about $10k/month to it from this OP. I kept it in cash until August 2015 then started to pull the trigger on investments. 2015 has gotten off to a rough start, we'll see where it goes...
$270k 401k/IRA
$230k brokerage
$50k cash
$80k home equity
Net Worth at the end of 2015 was $630k, which means we added about $10k/month to it from this OP. I kept it in cash until August 2015 then started to pull the trigger on investments. 2015 has gotten off to a rough start, we'll see where it goes...
$270k 401k/IRA
$230k brokerage
$50k cash
$80k home equity
Congrats. Looks to be well on track.
When i saw this post jump up, i went back and read some of the old posts...we're actually pretty close in our profile....we are 34 too and have essentially exactly the same amount in our 401k (~290k) and another ~40k in IRAs.
But the one major difference i see is that we focused first on paying off our mortgage (~600k value), so our brokerage is not as high (~100k instead) and we have relatively very little 'cash' (~40k), and also 529 accounts totaling about $46k.
i personally think the amount of cash you have is perfect; depending on your mortgage rate though, you might consider the pros and cons of paying that off sooner rather than later...or at least a refinance to a 10 or 15 year loan.
Congrats. Looks to be well on track.
When i saw this post jump up, i went back and read some of the old posts...we're actually pretty close in our profile....we are 34 too and have essentially exactly the same amount in our 401k (~290k) and another ~40k in IRAs.
But the one major difference i see is that we focused first on paying off our mortgage (~600k value), so our brokerage is not as high (~100k instead) and we have relatively very little 'cash' (~40k), and also 529 accounts totaling about $46k.
i personally think the amount of cash you have is perfect; depending on your mortgage rate though, you might consider the pros and cons of paying that off sooner rather than later...or at least a refinance to a 10 or 15 year loan.
anyways, well done.
Thanks!
We pay less than $300/month in interest on our mortgage, with around a 3% rate. I'm in no hurry to pay it off at this point unless I have a windfall investment gain. We have around 10 years left on it IIRC. It's starting to feel like we are making some real headway into saving and getting ahead of the curve. Feels good. Hope 2016 investments pay off.
The key is to ditch the "all or nothing" approach to investing and to learn to control your emotions. You can't be 100% in the stock market. And you also can't be 100% in cash. Neither of those 2 extremes is healthy.
If you have a 401K plan, I'd recommend putting it about 50%-60% in a stable value fund if you have one (typically pays a bit better than a money market). If your plan doesn't have a stable value fund, put keep 25% in money market & 25%-35% in a bond fund. Then I'd put the rest in a stock fund, maybe an index fund or perhaps a dividend oriented stock fund if you have one. Dividend oriented funds are usually less volatile and hold up better in bad times.
For your IRAs, I'd recommend a "conservative allocation" fund such as Vanguard Wellesley Income (60% investment grade bonds and 40% dividend paying stocks). Another good conservative allocation fund is Berwyn Income.
For a taxable account, I'd recommend Vanguard Tax Managed Balanced. It's 50% municipal bonds (which pay interest that is free of federal income tax) and 50% Vanguard Total Stock Market Index. Obviously, it's a good idea to keep a year's worth of living expenses in cash, which should alleviate your nervousness.
Just keep your allocation like this forever (50% to 60% bonds/stable value/cash and 40% - 50% stocks). You DO need to take some risk with your investments, but if you can save $3K per month, you don't need to take big risks provided you keep your lifestyle modest. Just remind yourself that being 100% in cash is risky. It earns almost nothing and the purchasing power is being eroded away by at least 2% per year due to inflation. Doesn't sound like much, but that erosion adds up to A LOT OF MONEY over time.
I just took another job and will make $35,000 next year. Provided I can make it thru training and keep my nose clean my new job pay will grow.
My wife got a much better job this year and has gone from roughly $35k to $50k per year (yay for her).
We are scared scared scared of investments losing money having been burned in the past so are invested VERY conservatively in MM accounts even in the investment accounts.
$98,500 401k / Roth 401k
$54,000 Roth IRA
$10,000 Stocks maybe that is vested
$140,000 cash
$28,500 brokerage acct just sitting there
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$40,000 give or take that we paid into our house to buy below 80% to refi, judging by comps that is a good equity value after RE sale commission if sold for market value. Home value roughly $175,000 conservatively and loan value $120,000. 3.125% 15 year.
$21,000 we bought a new car with 2 years ago, worth maybe $15,000 now +/-. We paid cash so no loan.
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I get about $386,000 in assets, of which $331,000 is liquid.
Debt:
$12,000 +/- in low, low student loan interest, around 2%. Dept service (interest) on that is roughly $30/month IIRC. I think we pay around $200 or so.
I want to stop living scared and actually invest. What do we do? Where to divvy it up? Should we talk to someone now? Who?
In order to understand how to help you overcome your investing fears, it would do a lot of good to tell us more about what exactly happened in the past when you got "burned". What did you invest in (be specific, don't just say "stocks" or "mutual funds"), how much, and why did you sell the investment at a loss?
Once we know why this happened to begin with, then we can begin discussing how to prevent it from happening again.
In order to understand how to help you overcome your investing fears, it would do a lot of good to tell us more about what exactly happened in the past when you got "burned". What did you invest in (be specific, don't just say "stocks" or "mutual funds"), how much, and why did you sell the investment at a loss?
Once we know why this happened to begin with, then we can begin discussing how to prevent it from happening again.
You're only 2 years late replying to the op's original post
Net Worth at the end of 2015 was $630k, which means we added about $10k/month to it from this OP. I kept it in cash until August 2015 then started to pull the trigger on investments. 2015 has gotten off to a rough start, we'll see where it goes...
$270k 401k/IRA
$230k brokerage
$50k cash
$80k home equity
You are doing great. Congrats for being ahead of curve. good luck for future.
You don't have a whole lot of options if you only have $1000, but you still have a few decent ones.
A Vanguard Target Retirement Fund would work. So would Vanguard STAR, which is a mix of stocks and bonds (60% stocks 40% bonds). If it's an IRA (Traditional or Roth), Dodge & Cox Balanced would also be a good choice.
I also like Oakmark Equity & Income. Their minimum for regular taxable accounts is $1000 and I think it's less for IRAs. It's had a couple of crappy years relative to others in the balanced fund category, but it's still a decent fund, IMO.
Pick one of the above funds and get going. The most important thing is to get started. The second most important thing is to consistently add money.
Does anyone else think it's fishy that two early 30 somethings with average jobs have a net worth if 300-650k?
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