Hey Tyler,
You guys were very helpful. Sorry for just sort of disappearing from the thread--I don't check 2p2 much anymore, and when I do, it's often from my phone.

I don't want to invest in a money market fund because the returns tend to be too low, especially given the artificially low interest rates on short-term bonds right now. In hindsight, I think that's more-or-less what you guys were saying, and I was nit-picking parts of your argument. So sorry about that.

Just to add to this. You can do the equivalent buy buying FXA (probably the cheapest way to take advantage of the difference in rates). You'd have lost over 10% after adding in the distribution this year compared to just stuffing your US dollars under your mattress.

***

As a small aside, I'm waiting for you to get frustrated and tell someone that they should invest all of their money, including their emergency fund, into deep out of the money January GLD calls.

Country you live in: U.S.
Income: $120K combined (married)
Risk Tolerance: Moderate
Timeframe for investment: Long term
Debt: $220K (approximately 180K is grad school loans which will be forgiven in 8 years)
Amount to Invest: $15K

We have a 6 month emergency fund in a separate savings account. I have a pension through my employer which I contribute to. My wife has a 401K through her job as well. We have almost zero credit card debt. Don't own a home, but would like to sometime in the near future.

We're considering opening a Roth IRA and investing in a Vanguard Target Retirement Fund.

Any advice would be appreciated.

So for the 180K you don't have to pay anything, just wait 8 years? Sounds like a deal. What is the other 40k in debt and what is the interest rate? I'm not a total debt nazi like Dave Ramsey but saving on interest is hard to beat investment wise.

Otherwise, I would say go for it. Also a good idea to stuff more in the 401k, if it has decent choices. If the 401k choices suck then just put in enough to capture the employer match.

Country you live in: U.S.
Income: $120K+ combined (married)
Risk Tolerance: High
Timeframe for investment: Long term
Debt: $4k (0% interest credit card sort of stuff)
Amount to Invest: $50K+

Would appreciate help here, really screwed up 2013 as it's been a busy year, wondering what best thing is to do now:

Only was contributing 6% to my 401k to max out the match and my partner I'm pretty sure doesn't have one. I've changed my elections to get the maximum benefit going forward and will set her up for the same, is there any way to get any of that benefit now? She's Army fwiw.

Regardless of what we can do there, we still have a pile of cash we should invest, are there tax advantaged plans we can put it in? Just we each put 5.5k into Roth IRAs? I would expect our income to exceed the 173k in a few years, would we then use the backdoor Roth at that point to continue funding the same accounts?

KingDan,

Money you need within a week's notice goes in a high-yield online savings account. I use Discover bank, which currently gives .85%. You can probably get a slightly higher rate if you shop around, but I've had zero issues with them in 4 years so I stay there. It takes 4 days to transfer money in/out with your checking account (at BoA or wherever).

Money that you want to invest for 5+ years goes into a Vanguard target retirement fund, or you can build your own 3-fund portfolio. Vanguard has a big wiki that explains all this stuff for beginners, or you can just scroll through this thread for tyler's posts and he explains stuff and links to the correct wiki pages.

Make sure you're creating as much tax sheltered space as possible every year (IRA, individual 401k, etc). Bonds go into tax sheltered space first, and then the other parts of your portfolio. If you have to hold some things in taxable space, oh well. I assume your tax burden is pretty big already so it probably doesn't make much of a difference.

PM me if you want contact information for some good tax guys in Vegas.

Congrats on being a huge boss and winning everything. #nubs

Can you explain why bonds go into tax sheltered space first?

Short version is that apart from 2008-2012*, there has been no government guarantee of bank deposits. Australian banks are typically unusually well capitalised compared to banks in other countries.**

*it's not clear to me whether the scheme concluded in 2012 for "small" deposits. Further information is available online here: http://www.guaranteescheme.gov.au/

**More reading here:
http://www.imf.org/external/pubs/ft/wp/2012/wp1225.pdf
http://www.rba.gov.au/publications/b...010/sep/6.html

so interest payments are not taxed

Any thoughts on Vanguard vs. Wealthfront vs. Betterment? I'd like to spend as little time as possible managing my finances and not have to make many (if any) choices regarding which investments to buy.

I am 22 (about to be 23) so my planning horizon is long enough to not really care about volatility and I have no need for the money I'm investing in the foreseeable future.

Figure out what funds/etfs/whatever you want to buy, and then figure out where you can get them the cheapest. Vanguard funds are generally available everywhere, but you can trade them for free in a vanguard account, so that's generally the easiest/cheapest option.

*ETA: I don't know anything about the other two places you mentioned, so maybe they're great too.

I didn't either, so I took a quick look. Apparently they have some model portfolio of ETFs that they will put in based on your age, goals, etc and charge you .25% a year to do it. I didn't see anything wrong with what they are offering, other than it is so easy to do yourself if you buy a couple of $10 books. But if the OP doesn't have any interest in managing his own money they are probably not bad options. Vanguard also offers fee based financial planning, I believe.

For the OP, here is a link to half a dozen lazy portfolios that you can build yourself for minimal fees:
http://www.marketwatch.com/lazyportfolio

There is also automatic rebalancing, tax-loss harvesting, and a wealth of other features that make it seem like a pretty good option for me. Was just curious if anyone had any thoughts or experiences with them.

scary_tiger!!

too late this year for 401k-type accounts.

if your partner is army i think she has access to TSP, which is terrific.

yes and yes.

note that you have until tax day 2014 to make your roth contributions for 2013, if you haven't already done that.

there are 529s (for education) and HSAs (for health spending; many people contribute to this with a long-term view of their health spending in later life), but IRAs and workplace retirement plans like 401ks are the meat and potatoes of the meal.

i've posted about wealthfront earlier itt.

i doubt their special sauce is enough to make up for extra fees, but they're an interesting option for someone who doesn't want to worry about any of the details or routine maintenance.

Thanks for your help, based on your reply I think we're on the right track with most of the stuff for this year.

Yeah, neither of those sound too appealing at the moment. I suppose major educational reform in the next 30 years has about no chance of happening, but I feel more comfortable not using that. HSA doesn't seem to make much sense now either with our employer provided low deductible plans. Will wait it out a bit.

Setting up a Roth with Vanguard took less than a half hour which blew my mind. I tried to talk about retirement planning with my lady friend and she turned the paper over and wanted to talk about enjoyment planning. Thankfully I convinced her there's enough money for both.

BUMP from other thread. Not trying to spam it, but realized that I probably posted it in the wrong place.

**This became longer than I expected, but thanks for reading.**

I probably asked this before, but I've been thinking about it and would like to get it out there again.

Right now I have these accounts:

[1] - Fidelity Roth IRA (fully funded for 2013 and will be fully funded for 2014).
[2] - American Fund Mutual Funds - Holds 6 funds of multiple types.
[3] - A second Retirement Account that was optional through my employer, but is third-party managed.
[4] - Employee Pension that I contribute 5% every paycheck and I believe is matched.
[5] - 2 bank (checking) accounts that both have separate savings accounts linked to them.

So here is the deal:

[*] I have had my Roth IRA since 2004, but haven't always funded it every year. 2013 was pretty good to me, but I'm not sure what my return was. I currently have quite a bit sitting in cash because I don't know what to do with it -- and will have more once I fund 2014.

[*] The American Funds came through my mom's workplace, which gave me free access to a financial adviser. The adviser has since left and it has flipped about 3 times to different advisers, but I haven't contributed anything new since I opened it. I got it because it was a convenient place to put money that I had laying around.

The funds I currently hold are:

- American Balanced Fund (ABALX)
- American High-Income Trust (AHITX)
- Capital World Growth and Income Fund (CWGIX)
- Europacific Growth Fund (AEPGX)
- The Growth Fund of America (AGTHX)
- New World Fund (NEWFX)

[*] The savings accounts hold a lot of cash that is only gaining about .25% interest at the most.

[*] My real issue is the secondary Retirement Account. I started the account by automatically putting in 10% of my paychecks (I like to always pay myself first). It also comes out before taxes, which effectively lowers my income taxes each paycheck. As of right now it is showing an 18.4% return for the year (opened in March).

10% is a good chunk of money that is getting locked in. It's doing 'well', but do I really want to leave it locked up in there? I'm not even sure if I can get it out any time, but if I can, I'm sure there is a major penalty. I can reduce the contribution amount at any time.

I really enjoy managing my own money so I 1. want to put my cash to use, and 2. want to make sure I'm maximizing my returns optimally.

I was thinking that I should probably start transitioning my Roth IRA to a more defensive, income producing account with dividends or ETFs. I'm considering using a mid-sized portion of my cash and putting it into either a Target Retirement Fund or Total Stock Market Fund to get started. Which is the better option? I can't say as of right now how I did in comparison to the entire market this year. I should get a statement from Fidelity showing my beginning and ending account balances.

I'm also considering opening a second investing account that I can manage myself since I really do enjoy managing my own money. I can buy individual businesses in that account once and if I find companies I want to buy. It'll open me up to taxes, but I also get the benefit of write-offs if I take losses.

Half of my brain is telling me to learn about buying bonds and options and to learn more about the financial markets in ways I've never really explored before, but that would come with the expectation that I would be opening up to a lot more risk.

You did already ask and the answers haven't changed.

The only additional thing I can add based on the re-asking is that you should probably cut down on the weed or meth as appropriate.

Country you live in: UK
Income: None as I'm a student
Risk Tolerance: Medium-High
Timeframe for investment: 5 years
Debt: None
Amount to Invest: $20K~

Other information:
Currently a student, have 1.5 more years of studying in university before completion then moving on to looking for a full time job most likely. I have very simplistic knowledge of investing and currently have a Santander current account giving me 3% up to £20k.

this answer is always the same for every single person who doesn't have any insight or real knowledge about something to provide an extra edge.

50% spy upfront (if you have a large amount get international market exposure via MSCI funds ((EEM, EWZ, etc))
5-10% buy precious metals if you don't have a place to store guy stock symbols for physical storage. GLD, SLV, etc
10% pure speculation pick your spot here I think bit coin and the other digital currencies are interesting here but pick something you believe in. This can be land, a friends business etc etc
Now you have 25-30% left over and you closed eye buy the rest into the market over the next x amount of weeks. If this amount is small break it up into months so you don't get churned.

I really hope this helps because I've given this advice a few times recently as I know a few friends sitting on way too much cash atm. This comes from my trading knowledge (have inactive series 7 and 63 still trade frequently), styles i've learned from a few books, and my still current broker buddy whom I really respect a ton but would never add the 10% spec part.

if you're graduating in ~1.5 years, why is your timeline 5 years? what happens then?

i think i would stay put in liquid savings for now. i don't remember the limey equivalent of an IRA, but if you can afford to start saving for retirement you might direct some cash there. but you said 5 years so idk.

lol

If you have no insight or knowledge, you should totally put 10% of your networth into pure speculation plays. What could go wrong?

For the benefit of anyone reading this thread, sizzlinbetta's views are most certainly not reflective of most people who post in this forum.

I honestly thought it was a spam post. I kept waiting for it, but it never came.