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Reading your post made me think you were me. This is a mirror image of my situation... 31, 300-400k net worth, over 50% of it in cash, wanting to buy a house in 2020, maxed all tax advantaged accounts, even same salary... and immigrant parents who worked min wage jobs. Are you my twin...?
To add to the conversation, for the bit that isn't in cash, I invested mine in a split between international, domestic index funds and bonds: VOO, VEU, VTSAX/ VTI. I also been investing in my Acorns account as moderately aggressive. I don't know enough about individual stock investing so I'm keeping it pretty simple for now and just DCA my remaining cash over the past year and beyond. Did wish I invested more in March but oh well we live we learn!
Thanks for sharing!
Fidelity, and I think Schwab, are pretty much free now and have no minimums. Don’t buy their expensive managed funds, buy cheap ETFs or their index funds and they have no transaction cost. Really no reason not to use these full services houses even when starting out.
Conversation Starter
OP - same here, first gen, parents have always saved aggressively without investing and I’m figuring all this out myself. Thinking I’m the younger you, 27 with 120k NW, just 1 year into maxing 401k HSA Roth IRA and recently opened a taxable brokerage account 😉
What’s I’ve found the most helpful is reading the investing start up kit on bogleheads and also the stock series by JL Collins. On bogleheads I also recommend reading lazy portfolios, tax efficient fund placement, and asset allocation across multiple accounts. I’ve been DCA’ing in both my Roth and taxable with extra cash and plan to continue DCA a set amount from my paycheck onc e I deploy all my extra (beyond emergency funds and what I’m saving for downpayment).
Hope this is somewhat helpful. Would love to talk more about through DM with others in similar shoes and grow together!
You single?
Pro
VP, I will think about selling Disney my story but who says it has to be either or (love or money). I am not saying I would trade love for money but it is important to find someone with similar goals. I want to retire rich and I want someone who is going to help achieve that goal. To each their own.
Visual Storyteller
Mail order bride. Unless I jumped the gun on the contd
Visual Storyteller
Lord, I made a joke, calm down people.
Pro
OP: Do what enables you to sleep at night. We all have our demons. My fear of losing it all is greater than my fear of missing out. I also grew up poor.
Pro
And that’s why I have been saving in cash but realized I am hurting growth potential. I wish I had realized it few months ago.
Grew up without money and parents working minimum wage jobs so investing money and potentially losing it all has been a fear. However, I am realizing that I am young and need to take risks. Have a pretty stable job even in this economy. A top performer so not really worried about being laid off. Bringing in about $140K (base plus bonus) and live below my means so saving quiet a bit.
Question:
1) What is the best Way to invest for long term?
2) should I just keep saving and try to pay off a house ASAP - looking to buy in 2020.
3) anything else that will yield good results?
I feel like I will regret not making use of the money and letting it sit in cash. Realizing that my portfolio Is mainly cash.
P.S.- certainly regret not making use of the dip in march. I invested $10K in VTI and a spread of arlines but clearly couldn’t gone in for more.
EDIT: I have been maxing out my 401K, IRA and HSA contributions last 3 years.
Rising Star
*individual investor
I feel that - grew up with parents who didn’t invest and felt the same fear with potentially losing money in the market.
I started with passive investing in an ETF following S&P (which historically always returns) then learned to build my own portfolio and finally started actively trading stocks
This was p helpful for me before: https://www.nerdwallet.com/blog/investing/how-to-start-investing/
Rising Star
Lot of good response here. Since you have been maxing out your 401(k), IRA, HSA, the next logical step would be a taxable brokerage account. You can open in one of the nationally known ones, though my recommendation is Vanguard. Invest in low cost, broad market based funds. VTSAX/VTI for stocks and VBTLX/BND for bonds. Have 90/10 split. Dollar cost average (DCA) into the market (though many models have shown that lumpsum is better; DCA offers more peace of mind) Keep down payment of home in cash.
If you want to really learn and understand, both the technicalities and the psychological aspects of investing, this series is one of the best ones. Easily readable and funny.
https://jlcollinsnh.com/stock-series/
My approach is the following:
- Max 401k investing
- Max HSA investing
- Find investment opportunities through friends and former business school classmates I trust, do my due diligence, and invest
- Invest in assets (home, other real estate, etc.)
My wife and I both do fairly well income wise so we are doing our best to save and invest before a child comes into the picture. We want to hedge/diversify by investing in index funds, cash producing business opportunities, and some physical assets.
If you're looking to buy a house in 2020 and at least half of your cash is going towards the down payment, then you're fine.
I'd just up your monthly contributions to investments so that this cash moves it's way into the market for the next 2-5 years. Do a monthly contribution, or max out your 401k and live on savings. Might not hurt to find a good rental if you're into landlording.
Didn't realize he had studied your socioeconomic background so thoroughly. My bad😉
What’s your rationale for holding so much cash?
Pro
Thank you!
Do you own a home? If not, might be time.
Buy some commercial real estate.