Well, I would have to disagree with that assertion. The average person would be better off getting a little bit educated and invest in a TDF.

The average person cannot distinguish between someone who knows what they are doing and Peter Schiff.

Teflon is corrrect in that I was exaggerating to make a point - I don’t know but I would imagine it would be tough to find an advisor charging 3% or more a year anyway. If I remember correctly a poster asked how his grandpa (or someone maybe it was his mom or someone else who is already retired) should invest and someone he spoke to suggested 80% in stocks. The hand holding an advisor does alone is worth >.25% IMO.

Back to the point: big lol for saying someone knows nothing about investing because he doesn’t know the best site to start a HSA.

Hi guys,

New investor here!

I have already realized some mistakes I made but please please please give me advice on the future.

I am very young. Early 20’s have a FT job with a 401k (contributing the max) and I opened a Roth IRA thru fidelity which I maxed out for the year as well In September

For the fidelity account I invested 3k in a target date fund, 1k in an S&p index fund

500/500/500 in a millennial account, mid cap index fund and small cap index fund

I think my problem was I invested the whole amount at one time right before the market started to go down

I realize I’m 2019 I will invest small amounts at regular intervals

Do these funds sound appropriate or should I just contribute it all to a target date fund?

I play on buying a house in the next 1-2 years and current have no debt. I have enough saved in a regular savings account for 20% more on a house and emergency fund money left over

ALL thoughts and advice is appreciated

Seems like you are doing great so far. For simplicity, I think you could just throw all your new investment $ in a target date fund and forget about the others. At your age, you should not care if the market goes down. That will let you accumulate more shares at a lower cost for a long time frame to grow.

Thank you very much for the feedback!

My 401k thru work is all a target date fund but my Roth is split.

I just didn’t know if it would be more “diversified” if I did it that way.

Plus the fees are higher in the target date fund

I have my non work 401k stock $ mostly all in VTI, which is very low cost total us stock market etf. You could use that or another similar etf in the roth if you wanted lower fees.

Richard, what are you getting on your 20% dowmpayemnt money and emergency fund? Any thoughts on investing part of it or starting to invest some of it if you see your checking/savings account grow? I only ask because if you’ve already saved that much you are likely not spending what you are making even after Roth & 401k contributions.

Being in your early 20s and being able to max out both a 401k & Roth, having an emergency fund & 20% down for a house is amazing. You should be proud of what you’ve been able to save.

The interest rate you mean?

It’s extremely poor. Not even a dollar a month I don’t think.

What do you mean? Like maybe put it in short term investments or more liquid investments?

Yeah I’m fortunately able to save a decent amount from work (over 50% of my net income a month)

Thank you very much for the nice compliment too! I am very fortunate but still looking for opportunities and advice from others to maximize

May want to consider getting an online high interest savings account for the emergency fund and down payment.

Assuming you are going to continue having a job, don't worry. The problem you mention is an unimportant one.

Since you are young, investing in a target date fund is wise. Why think if you don't need to?

You can get slightly cheaper expense ratios "rolling your own" versus a target date fund, but the target date might be worth the slightly higher costs since it's simple and it might also keep you from ****ing around when the market is volatile. (i.e. - set it and forget it.)

I definitely thought about this (Ally)

Is there any reason not to just rely on credit cards as your emergency fund? Especially if you don't have dependents? It's easy to get $50k+ in credit cards with no fees and you'll probably make some money in sign up bonuses and build your credit rating. Obviously the interest rates are horrible but the calculation should be something like CC interest * chance you have an emergency < EV of investing your emergency fund. Chance of emergency has to be so big as to not be unexpected to make holding cash +EV.

No there isn't, especially if you have liquid investments that you can sell to pay off the cards. Holding a large emergency fund in cash when you could invest it is super financially irresponsible, but for some reason pitched as the holy grail of financial planning.

One fairly common sort of emergency is the reason why people recommend cash (loss of income at the same time as a market crash). If you are saving correctly, then a 3-6 month cushion of cash shouldn't be a big percentage of your net worth.

It also feels good, which is nice. People like to feel good.

That's because, believe it or not, it's a closer to optimal decision than the alternative for the average person, which financial planning is meant for

For most(?) people a 6 month cushion is >100% of their net worth.

If market crash + job loss is your worry and you insist on something that won't decline in value in that situation, there's still better ways to do it than holding cash and losing value to inflation.

If you're incapable of making responsible decisions, I don't see how having a bunch of accessible cash is going to help

There is something to be said about the psychological aspect of this. It may be suboptimal, but if it makes you extremely nervous to have any type of debt at all, yes, you may have a mental disorder, but it is closer to optimal to decide to have a reasonable amount of cash on hand to assuage your nuttiness. Thus, it is closer to optimal than the alternative

Those (I'll agree "most") people are screwed in any case and aren't in a position to invest.

"Where should I put my money if I don't have a pot to piss in and have a lack of ability to spend less than my full income?"

you state facts. i kno this isn't much but...

dumbass w cash > dumbass w credit card debt

Probably toward paying off your credit card debt instead of saving it under a mattress.

But you're right, those people need a different category of advice.

the problem is the dumbass w cash usually also has credit card debt and is incapable of understanding that the cash needs to go toward paying off that 24% interest debt

They (those in the "most") typically aren't in a position to make good decisions. They aren't going to get out of high interest debt, or save up a cushion, or invest for the distant future. This is about 95% math and 5% behavioral economics. Being low income does tend to constrain choices to a short-term survival mentality.

"If you just pay down debt with 20% of your income and then save up a nice cushion once you are done with that and then invest wisely" is nonsensical when you are a bit hungry and also need tires for your ****ty car.