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[Ogodei]

I'm actually going to start this later this month. Just got my first living-wage (30k a year) job on the 2nd and they don't have a retirement plan (small nonprofit, though in exchange they fully-fund our individual health insurance, zero premium, at least for now), so i was figuring on starting with a Roth because like the OP says, i'm poorer now than i hope to be even in a few years, so might as well just let the taxes go.

I'll only be able to plow about $100 a month into it, though :-(. I want to save money upfront for other stuff like Lasik (save money in the long run), or for future cars or vacations and stuff. The retirement calculator i looked at said i need to average about $1000 a month for 40 years to get to 1.5 million in savings (500,000 principal growing 200% over 40 years), so i would have to start making that up later on, but I would hope to climb into a more secure larger nonprofit which would have retirement benefits (along with getting my income closer to 50k) after 1.5-2 years at this job.

 

[tokkun]

My Roth IRA is using the 2050, but I'm thinking of ditching it for VTSAX. Better returns and lower expense ratio, but I'd have zero bonds so a tank would hurt more I guess :/

2050 is only 10% bonds. It's not going to make that much of a difference in your returns. I would be willing to bet that dropping the International stock allocation makes a bigger difference, though I don't know if it will be positive or negative.

 

[Piecake]

I'm actually going to start this later this month. Just got my first living-wage (30k a year) job on the 2nd and they don't have a retirement plan (small nonprofit, though in exchange they fully-fund our individual health insurance, zero premium, at least for now), so i was figuring on starting with a Roth because like the OP says, i'm poorer now than i hope to be even in a few years, so might as well just let the taxes go.

I'll only be able to plow about $100 a month into it, though :-(. I want to save money upfront for other stuff like Lasik (save money in the long run), or for future cars or vacations and stuff. The retirement calculator i looked at said i need to average about $1000 a month for 40 years to get to 1.5 million in savings (500,000 principal growing 200% over 40 years), so i would have to start making that up later on, but I would hope to climb into a more secure larger nonprofit which would have retirement benefits (along with getting my income closer to 50k) after 1.5-2 years at this job.

One thing to keep in mind is that you will need to save a lot less if you save a lot and invest that early.

If you can't due to financial reasons then there is no way around that, but understanding that you will have to put a lot more money towards investing if you start late or try to make it up later is really important info to have.

 

[Ogodei]

One thing to keep in mind is that you will need to save a lot less if you save a lot and invest that early.



If you can't due to financial reasons then there is no way around that, but understanding that you will have to put a lot more money towards investing if you start late or try to make it up later is really important info to have.

Very good point.

Essentially i have budgeted roughly $400/month. Might go up a little or down a little depending on how my monthly budget actually crunches later on. Short term, I need to build up my emergency fund a bit, but I also want to save for other stuff, or plow some extra money into student loans from time to time. I also budget generously for me going out, which is unlikely to happen at the level predicted most months (though will definitely hit it others).

First "savings goal" after the emergency fund is Lasik, so once i get an estimate on that maybe I can derive an attainable timeframe and increase retirement savings accordingly.

 

[Wellington]

My Roth IRA is using the 2050, but I'm thinking of ditching it for VTSAX. Better returns and lower expense ratio, but I'd have zero bonds so a tank would hurt more I guess :/

If you're undecided why not just split your contribution next (or this) year. For example with my 401k I have a ratio set to dump the bulk of my contribution each paycheck into the Fidelity 2045 - FFOLX (fuck I am old) fund and the rest to the Fidelity S&P 500 index fund - FXSIX. That way you're getting the (marginal) increase in volatility that you wan't without having to do the switch.

Very good point.

Essentially i have budgeted roughly $400/month. Might go up a little or down a little depending on how my monthly budget actually crunches later on. Short term, I need to build up my emergency fund a bit, but I also want to save for other stuff, or plow some extra money into student loans from time to time. I also budget generously for me going out, which is unlikely to happen at the level predicted most months (though will definitely hit it others).

First "savings goal" after the emergency fund is Lasik, so once i get an estimate on that maybe I can derive an attainable timeframe and increase retirement savings accordingly.

I got lasik in March of 2009, it was far and away the best money I have ever spent on myself. I wore glasses or contacts full time, haven't needed anything since and never had any issues. YMMV of course but I have zero regrets.

 

[SyNapSe]

Let's say you were contributing 5% to your Traditional 401k one year and moved it to 15% next year.

That moves a chunk of your income from taxable to non-taxable. Does the amount youre taxed out of your paycheck adjust for this or is this reimbursed at tax time when you fill in the 401k info from your W-2?

 

[Cyan]

Let's say you were contributing 5% to your Traditional 401k one year and moved it to 15% next year.

That moves a chunk of your income from taxable to non-taxable. Does the amount your taxed out of your paycheck adjust for this or is this reimbursed at tax time when you fill in the 401k info from your W-2?

This should alter your withholdings, yes. You can easily check this on your pay stubs once you've made the change.

 

[Piecake]

Let's say you were contributing 5% to your Traditional 401k one year and moved it to 15% next year.

That moves a chunk of your income from taxable to non-taxable. Does the amount youre taxed out of your paycheck adjust for this or is this reimbursed at tax time when you fill in the 401k info from your W-2?

Your paycheck will decrease if you increase the amount that you put into your 401k. You will pay less or get more back in taxes at the end of the year as a result of having less taxable income due to putting more into your 401k.

If you don't want to wait until tax time, you can increase your allowances on your paycheck. You should do the math to make sure that you increase it by the right amount though because you can end up paying a lot to the government if you fuck up and take too many.

 

[Randolph Freelander]

Let's say you were contributing 5% to your Traditional 401k one year and moved it to 15% next year.

That moves a chunk of your income from taxable to non-taxable. Does the amount your taxed out of your paycheck adjust for this or is this reimbursed at tax time when you fill in the 401k info from your W-2?

Your mileage may vary, but the percentage withheld from your check should decrease. So while before you might notice, say, 18% of the taxable gross withheld as federal taxes, you might instead observe 16%, as the algorithm for withholding adjusts to your lower taxable amount, and predicts that less of your income will fall into the higher marginal rates.

If you notice, you typically pay a higher percentage in taxes when you work overtime (if you are hourly) or receive a bonus, and it's the same basic idea.

 

[LordGorchnik]

I feel like I am not doing enough right now (or I am doing something completely wrong).

At 31 years old I just now am making enough that I could open up my Roth IRA and fully funded it for 2016. So I have a whopping $5500 in my account right now.

As for positions I went with $2500 in FRXIX and $3K in FSTMX. This may not be the best move as this is all domestic stock which is never smart. Unfortunately I don't think I can change positions until 90 days have passed or I get slapped with a fee.

My 401K on the other hand only has around $28K in it and I opened that account almost 8 years ago. I contribute 15% of my paycheck and company matches 5%. Has the account grown? Sure. But when people are claiming a single person needs at least $1.5 million to live comfortably in retirement I'm not quite sure if I am on track.

Positions in this one are 75% in FFKHX which is their Freedom 2050 fund and 25% in FSCRX which is FID Small Cap discovery

 

[Piecake]

I feel like I am not doing enough right now (or I am doing something completely wrong).

At 31 years old I just now am making enough that I could open up my Roth IRA and fully funded it for 2016. So I have a whopping $5500 in my account right now.

As for positions I went with $2500 in FRXIX and $3K in FSTMX. This may not be the best move as this is all domestic stock which is never smart. Unfortunately I don't think I can change positions until 90 days have passed or I get slapped with a fee.

My 401K on the other hand only has around $28K in it and I opened that account almost 8 years ago. I contribute 15% of my paycheck and company matches 5%. Has the account grown? Sure. But when people are claiming a single person needs at least $1.5 million to live comfortably in retirement I'm not quite sure if I am on track.

Positions in this one are 75% in FFKHX which is their Freedom 2050 fund and 25% in FSCRX which is FID Small Cap discovery

This is very dirty math and should just be used as a rough estimate, but if you contribute 700 dollars to a retirement fund every month and you see an average return of 7% then you should end up with about 1.5 million when you are 65.

Also, domestic stocks are major international players and do business internationally. You get exposure to international markets just by holding US domestic stock. I know some people here don't hold any international at all. I personally do, and hold a good deal of it, but I wouldnt worry that you don't.

I would also get you to think more about your REIT holdings. That is a sector bet. You are betting that the US real estate market will outperform the US Total Stock index for as long as you hold that stock. There is nothing inherently superior about the REIT sector to suggest that it will. It certainly could, but there is no guaranty.

 

[SyNapSe]

If you notice, you typically pay a higher percentage in taxes when you work overtime (if you are hourly) or receive a bonus, and it's the same basic idea.

I'm salary exempt so I don't look at my pay stub at all typically. I went into our web system and I could pull up both my current and an old pay stub from last year and it most certainly is adjusting the federal withholding. Thanks all

or at least I'm paying less federal inc. taxes now for some reason. Thanks, Obama

 

[tokkun]

Also, domestic stocks are major international players and do business internationally. You get exposure to international markets just by holding US domestic stock. I know some people here don't hold any international at all. I personally do, and hold a good deal of it, but I wouldnt worry that you don't.

I'd approach this question by comparing these two graphs:

https://personal.vanguard.com/us/funds/snapshot?FundId=0085&FundIntExt=INT
https://personal.vanguard.com/us/funds/snapshot?FundId=0113&FundIntExt=INT

For the first half of the last decade, the domestic and international indices were highly correlated, so it certainly looked like holding only domestic was sufficient from a diversification standpoint, and simpler allocations are better, all other things being equal.

However in the latter half of the decade the domestic index has soared while the international has stagnated. Now one possible explanation is that the US economy has just been doing a lot better than the rest of the world since 2011. The other is that US is in a bit of an equity bubble; this would seem to be supported by other economic indicators:
http://www.starcapital.de/research/stockmarketvaluation

The problem here is that this argument about US companies getting a lot of their profits overseas does nothing to protect you against over-valuation of US equities. So personally I opt to hold international (via a Vanguard Target Date fund) as a hedge against US valuations. There are arguments to be made that the US actually has been doing better - we have been more politically & economically stable than a lot of other countries and haven't gone overboard with austerity - so it's not exactly clear that it's the right call, but I tend to think that things like valuations tend to win out over the medium-to-long-term investment horizon, barring catastrophic events.

 

[Randolph Freelander]

By the way, the KOD is still in full effect. I bought more VTI on Tuesday. Hence the past 3 days...

Once again, for those of you with 401K contributions going in today, you're welcome.

 

[GhaleonEB]

By the way, the KOD is still in full effect. I bought more VTI on Tuesday. Hence the past 3 days...

Once again, for those of you with 401K contributions going in today, you're welcome.

My paychecks are on the 15th, unless that's on a weekend, in which case it pulls in to Friday. So my 401k contribution does indeed buy at the prices from EOD today. Thank you, I appreciate it.

 

[Smokey]

Any suggestions for good investment books to read? Going to start at page 1 of this thread and go from there, but want some books as well.

Right now I just have my 401k. I want to do things outside of that though, but feel I need to level up my financial literacy first.

 

[Piecake]

Any suggestions for good investment books to read? Going to start at page 1 of this thread and go from there, but want some books as well.

Right now I just have my 401k. I want to do things outside of that though, but feel I need to level up my financial literacy first.

http://www.amazon.com/dp/0470067365/?tag=neogaf0e-20

I havent read it, but bogleheads know what they are talking about.

 

[gutshot]

Have read through parts of this thread and feel like I'm starting to wrap my head around some of this stuff, but I have a couple questions.

1). I currently have a great job that deposits money into my retirement fund for me. No matching or anything like that, they just put in a set amount every month. The amount contributed is a percentage of my salary; currently it is around $530. I've done the math, and without adjusting for any investment gains or future increases in salary, I should expect to have around $160k saved up once I hit retirement age. That seems pretty low to me. Should I be investing more than the $500ish a month that my job currently invests for me? What is a good number I should be aiming for?

2). In the next few months, I will be inheriting a decent amount of money from my grandmother. We've already earmarked some of it for paying off debts and fixing up a few things around the house. I also want to invest a chunk of it (around $20k) as well. Should I just dump that into my retirement fund? Or start a new fund? Are there any short term investments that you would recommend which would allow that money to work for me while still remaining somewhat liquid?

Thanks in advance for any advice you can give!

 

[giga]

Any suggestions for good investment books to read? Going to start at page 1 of this thread and go from there, but want some books as well.

Right now I just have my 401k. I want to do things outside of that though, but feel I need to level up my financial literacy first.

the intelligent investor
the little book of common sense investing

 

[chaosblade]

Have read through parts of this thread and feel like I'm starting to wrap my head around some of this stuff, but I have a couple questions.

1). I currently have a great job that deposits money into my retirement fund for me. No matching or anything like that, they just put in a set amount every month. The amount contributed is a percentage of my salary; currently it is around $530. I've done the math, and without adjusting for any investment gains or future increases in salary, I should expect to have around $160k saved up once I hit retirement age. That seems pretty low to me. Should I be investing more than the $500ish a month that my job currently invests for me? What is a good number I should be aiming for?

2). In the next few months, I will be inheriting a decent amount of money from my grandmother. We've already earmarked some of it for paying off debts and fixing up a few things around the house. I also want to invest a chunk of it (around $20k) as well. Should I just dump that into my retirement fund? Or start a new fund? Are there any short term investments that you would recommend which would allow that money to work for me while still remaining somewhat liquid?

Thanks in advance for any advice you can give!

The general idea is that most of your money is going to come from gains. Your interest earning interest on it's interest, and so on. If you are young "only" investing $160k could be enough, depending on the lifestyle you want after retirement.

I think this has been posted here a few times:

Still, if you can afford to do more, do it, especially if you are young.

 

[tokkun]

Have read through parts of this thread and feel like I'm starting to wrap my head around some of this stuff, but I have a couple questions.

1). I currently have a great job that deposits money into my retirement fund for me. No matching or anything like that, they just put in a set amount every month. The amount contributed is a percentage of my salary; currently it is around $530. I've done the math, and without adjusting for any investment gains or future increases in salary, I should expect to have around $160k saved up once I hit retirement age. That seems pretty low to me. Should I be investing more than the $500ish a month that my job currently invests for me? What is a good number I should be aiming for?

It is pretty hard to give a good answer to this to a young person, because it is impossible to know what things will be like 40 years from now - will people be living longer, how will the cost of essential items like food, housing, or medical care have changed, what sort of social welfare programs will exist, etc.

If you're looking for current rules of thumb, though one popular one is that if you have ~25X your annual expenses saved, you can pretty much live indefinitely on a reasonable 4% real after-tax return on your savings. Of course you will have to accurately estimate your living expenses in retirement, which again is impossible to do with any certainty.

2). In the next few months, I will be inheriting a decent amount of money from my grandmother. We've already earmarked some of it for paying off debts and fixing up a few things around the house. I also want to invest a chunk of it (around $20k) as well. Should I just dump that into my retirement fund? Or start a new fund?

If your work retirement account is a 401K you can't simply drop the money into it, because the requirement for 401K contributions is that they have to come out of your paycheck. You could, however, live off of the $20K inheritance and contribute 100% of your paycheck to the 401K until you hit the yearly limit.

Are there any short term investments that you would recommend which would allow that money to work for me while still remaining somewhat liquid?

Thanks in advance for any advice you can give!

Unfortunately there is no investment that gives low risk, good returns, and high liquidity. The basic idea of retirement investing is that if you are willing to give up liquidity (i.e. put your money in diversified stocks and keep it there for 30 years) you can get good returns at low risk.

 

[Zaraki_Kenpachi]

Are there any good calculators that let you play with his much you add on an annual basis? I'm too lazy to make it in excel but the ones online are too simple. Even something that allows a yearly increase. For example, I continue 5k annually now, if I keep it with my salary increase of 3%annually what is my contribution/total ending balance. Want to play with the numbers, don't have much wiggle room but always feels like I won't have enough.

 

[PflargBlarg]

Are there any good calculators that let you play with his much you add on an annual basis? I'm too lazy to make it in excel but the ones online are too simple. Even something that allows a yearly increase. For example, I continue 5k annually now, if I keep it with my salary increase of 3%annually what is my contribution/total ending balance. Want to play with the numbers, don't have much wiggle room but always feels like I won't have enough.

Not sure exactly what you're looking for but http://www.cfiresim.com/input.php is very comprehensive. I know it's more of a predictive tool but I think it also shows the contribution totals and stuff like that too.

 

[Wellington]

I thought this was a good post that I found over on Reddit's FI page. https://www.reddit.com/r/financiali...inancial_independence_adrift_in_the_vastness/

http://monevator.com/financial-independence-how-to-get-there/

We don’t talk about it often but the reason I’m investing is because I want to be financially independent (FI). I’m a quarter of the way through which is a difficult place to be.

It feels like I’m rowing solo across the Atlantic. The planning is done, the course is set and all I gotta do is row.

Behind me are hundreds of miles of flat, grey ocean. There’s nothing on the horizon. In front of me, are thousands of miles of flat, grey ocean. There’s nothing on the horizon.

It’s hard to tell I’m moving at all.

An ancient mariner would pass the time by juggling mortal danger and hallucinations. A modern mariner has the same options as well as their GPS tracker and calls from home.

All four are needed to keep the rowboat on an even keel.

More at the link.

He brings up some decent points and ideas, I am a looooong ways from my goal and the push to get there has been good... but it is hard to get excited. All I have been working on is to continue to live frugally (within reason, have to live while young too) and increase my income so I can contribute more.

 

[anonymous_abc]

I thought this was a good post that I found over on Reddit's FI page. https://www.reddit.com/r/financiali...inancial_independence_adrift_in_the_vastness/

http://monevator.com/financial-independence-how-to-get-there/


More at the link.

He brings up some decent points and ideas, I am a looooong ways from my goal and the push to get there has been good... but it is hard to get excited. All I have been working on is to continue to live frugally (within reason, have to live while young too) and increase my income so I can contribute more.

I've been in that place for a while now, not much else I can optimise away, my partner is fully on board and we are just waiting if out now....

 

[Piecake]

I thought this was a good post that I found over on Reddit's FI page. https://www.reddit.com/r/financiali...inancial_independence_adrift_in_the_vastness/

http://monevator.com/financial-independence-how-to-get-there/


More at the link.

He brings up some decent points and ideas, I am a looooong ways from my goal and the push to get there has been good... but it is hard to get excited. All I have been working on is to continue to live frugally (within reason, have to live while young too) and increase my income so I can contribute more.

I like the idea of financial independence and retiring early, but I chose a career that doesnt really make enough money to make saving the necessary amount of money all that viable for me.

 

[GhaleonEB]

I thought this was a good post that I found over on Reddit's FI page. https://www.reddit.com/r/financiali...inancial_independence_adrift_in_the_vastness/

http://monevator.com/financial-independence-how-to-get-there/

More at the link.

He brings up some decent points and ideas, I am a looooong ways from my goal and the push to get there has been good... but it is hard to get excited. All I have been working on is to continue to live frugally (within reason, have to live while young too) and increase my income so I can contribute more.

An interesting post, thought all I really took from it is, stay the course. You'll get there when you get there. Signs of progress are basically intangible.

I have found that to be accurate, so far. I've had the same structure to my annual tracking file since I started it up, 13 years ago. On one tab is a summary by month, going back all 13 years. Over time, the numbers have gotten larger. That's the only difference, in practical terms, between now and when we started. (Well, we own now rather than rent. But our overall budget is similar.)

13 years and all that's really changed are some numbers on a spreadsheet. But one day those numbers will mean I can retire and change my life completely. It's actually a pretty strange thing to think about.

Back to the article: this section ends with a typo that, in context, has to be Freudian.

One of the things that makes FI socially tough is that there are no outward signs of success. If anything it looks like you’re going backwards.

Especially when much-loved possessions look like the love might be killing them.

If you makeover your house, your friends will coo over your freshly gilded splendour.

Voila! Instant validation.

But inviting the neighbours to take a look at your net worth spreadsheet is no way to impress the Jones’s.

So you need to create your own journey planner that joins the dots from first step to FU.

 

[Mozz-eyes]

Possibly been answered before...

What are my options in the UK?

 

[Neverwinter27]

Hello, I am new to investing, and I have just invested 5,500.00 to an IRA traditional from Vanguard (in a Federal Money Market Fund (Settlement fund), and would like to know where to go from there.

 

[TheRagnCajun]

What are you getting on a money market fund? 1%? I think you might be better off investing in an ETF that follows the market index.

 

[giga]

What are you getting on a money market fund? 1%? I think you might be better off investing in an ETF that follows the market index.

Not even. It's the settlement fund that always maintains a $1 value. She should go read the op.

 

[Piecake]

Possibly been answered before...

What are my options in the UK?

Pretty sure Vanguard is in the UK, and I am sure that brokers there do offer low cost index funds. You might have to look around to find them.

Hello, I am new to investing, and I have just invested 5,500.00 to an IRA traditional from Vanguard (in a Federal Money Market Fund (Settlement fund), and would like to know where to go from there.

Like others said, I would definitely read the OP. If you have more specific questions, then please feel free to ask them.

If you want to know what I would do, I would invest that 5.5k in the Vanguard Total Stock Market Index Fund. Next year, you can make the choice whether you want to add bonds or international to your portfolo.

Please read up on this more for yourself because it is pretty crucial that you understand why you are doing this. If you don't, that makes it much more likely that you are going to bail at the wrong time, try to time the market, etc., which is the last thing you want to do.

 

[Neverwinter27]

Can you confirm the ticker code for the Vanguard Total Stock Market Index Fund? Is it VTSMX?

Is there also a minimum balance I have to maintain for the Federal Money Market settlement fund that I have that I will be transferring from?

 

[Makai]

Can you confirm the ticker code for the Vanguard Total Stock Market Index Fund? Is it VTSMX?

yes

 

[Randolph Freelander]

Is there also a minimum balance I have to maintain for the Federal Money Market settlement fund that I have that I will be transferring from?

$3000 minimum balance if you stayed in it (but don't). If you're unsure about going all stock in the VTSMX, get into one of their target date funds, the one closest to your anticipated year of retirement. It will give you domestic and international stock as well as stabilizing bonds.

 

[Neverwinter27]

One more thing, Im also planning for short term(3-4 years) investment to buy a condo. Right now, the rest of my funds is just currently sitting in my savings account. Whats the best investment vehicle in order for me to reach this goal? Im looking at Ally Bank with their 3 year CD of 1.55% APY as a possible avenue.

 

[Randolph Freelander]

One more thing, Im also planning for short term(3-4 years) investment to buy a condo. Right now, the rest of my funds is just currently sitting in my savings account. Whats the best investment vehicle in order for me to reach this goal? Im looking at Ally Bank with their 3 year CD of 1.55% APY as a possible avenue.

That CD is going to be better than leaving the funds in savings, but it's still going to lag inflation. I suggest maybe going with a bond fund, something like VBMFX, or VBTLX if you have enough for the Admiral version.

Just be aware that it's not without risk. It's susceptible to downturns, but nowhere near what a stock fund would be. During the Great Recession, it lost maybe 8-9% from peak to trough, though not as much as you factor in dividend payments, and it rebounded sooner than the overall stock market.

 

[Darren870]

I have a question directly related to the OP. I live in Hong Kong and its more expensive for me to invest in US stocks.

Does anybody know of an Index Fund that I could invest in locally? There are a lot of ETF funds here but I'm not sure if they are the same thing.

Ok cool. My main concern was that ETFs were an entirely different thing.

I just wanted to find something similar to what was suggested in the OP since I can't really invest in the suggested index funds due to higher fees. I mean, I can set up a US Stocks account but I dont wanna get burned on the higher fees.

I just saw this, but if you are a US Citizen... Do NOT invest in any index funds or ETFs in Hong Kong, or any other overseas market as a US Citizen. You have to pay tax on unrealized gains every year. Its not worth it and your accountant will charge you up the ass.

 

[Piecake]

You would think the financial industry would be too embarrassed to object to the idea that advisers should act in their clients’ best interests when giving advice and selling investments for retirement accounts. But last week industry groups filed two federal lawsuits against new rules that say just that.

The groups’ legal arguments are vacuous. For example, the rules require advisers to disclose compensation, incentives or conflicts of interest that might induce them to recommend one strategy or product over another. That is basic disclosure for a fiduciary. But one suit says such disclosure would violate advisers’ right to free speech by forcing them to discuss things they would rather not discuss.

http://www.nytimes.com/2016/06/05/opinion/sunday/investor-protections-in-the-cross-hairs.html?src=me

Won't someone think of of investment bankers' freedom of speech?

 

[Vard]

I thought this was a good post that I found over on Reddit's FI page. https://www.reddit.com/r/financiali...inancial_independence_adrift_in_the_vastness/

http://monevator.com/financial-independence-how-to-get-there/


More at the link.

He brings up some decent points and ideas, I am a looooong ways from my goal and the push to get there has been good... but it is hard to get excited. All I have been working on is to continue to live frugally (within reason, have to live while young too) and increase my income so I can contribute more.

Good read. It really is all about having micro-goals to keep encouraging you to do what you're doing, and in theory there should be a snowball effect where the savings really start going up higher and faster the more you have built up. It's good to be realistic and project out how long it's going to take you too, so you're not asking "are we there yet?" when your journey is not even halfway over time-wise.

 

[entremet]

Good read. It really is all about having micro-goals to keep encouraging you to do what you're doing, and in theory there should be a snowball effect where the savings really start going up higher and faster the more you have built up. It's good to be realistic and project out how long it's going to take you too, so you're not asking "are we there yet?" when your journey is not even halfway over time-wise.

This reminds of Dave Ramsey's Baby Steps method, which I find highly effective since it removes complexity and focuses on quick wins.

 

[Makai]

Well now I own $43 of T-Mobile stock thanks to their giveaway. I wonder if I can transfer this to my Vanguard.

 

[Piecake]

Well now I own $43 of T-Mobile stock thanks to their giveaway. I wonder if I can transfer this to my Vanguard.

I am kinda interested to see how many people will just straight up sell it

 

[Mrbob]

So I have some shares in brk b that I have made a little money on. This isn't in a retirement fund but it is for long term retirement. Plan on sitting on the stock until I retire or need the money. I've been thinking about selling the stock and sitting on cash until we get a correction and then putting that money into SPY. This way I can reinvest with dividends. Good idea or should I just sit on the brk b stock?

Or I could put the money into betterment. Just starting to think i might have a better option than brk b.

 

[Randolph Freelander]

So I have some shares in brk b that I have made a little money on. This isn't in a retirement fund but it is for long term retirement. Plan on sitting on the stock until I retire or need the money. I've been thinking about selling the stock and sitting on cash until we get a correction and then putting that money into SPY. This way I can reinvest with dividends. Good idea or should I just sit on the brk b stock?

Or I could put the money into betterment. Just starting to think i might have a better option than brk b.

Selling BRK B and going into SPY is fine. Selling and waiting on a correction to go into SPY is not. Move your funds or don't, but don't try to time the market.

 

[Baron Doggystyle von Woof]

This thread is really good. I was reading up on investing.

I'm 30 and I have a good job (finally). My dream is to retire early. (around 45-50).

I want to invest at least 6000 per year to do that. Will I be able to retire early by then or do I need to save up and invest more?

 

[Darren870]

This thread is really good. I was reading up on investing.

I'm 30 and I have a good job (finally). My dream is to retire early. (around 45-50).

I want to invest at least 6000 per year to do that. Will I be able to retire early by then or do I need to save up and invest more?

You likely wouldn't be able to retire early with only 6k a year. You'd have about 270k assuming 7% interest. Don't know how long you can make that stretch....

 

[Randolph Freelander]

This thread is really good. I was reading up on investing.

I'm 30 and I have a good job (finally). My dream is to retire early. (around 45-50).

I want to invest at least 6000 per year to do that. Will I be able to retire early by then or do I need to save up and invest more?

Literally no chance. You're going to have difficulty enough retiring at 65*, to be honest. You're going to want to increase your savings rate as soon as you can.

-----------------
* $6000 invested annually, compounding at 9% for 35 years (age 30 to 65) comes to just shy of 1.3 million, which isn't the same as 1.3 million today due to inflation (it's roughly 550,000, if we hold inflation to 2.5%).

 

[Baron Doggystyle von Woof]

Literally no chance. You're going to have difficulty enough retiring at 65*, to be honest. You're going to want to increase your savings rate as soon as you can.

-----------------
* $6000 invested annually, compounding at 9% for 35 years (age 30 to 65) comes to just shy of 1.3 million, which isn't the same as 1.3 million today due to inflation (it's roughly 550,000, if we hold inflation to 2.5%).

Thanks for the explanation! I will have to step up my game. I will try to double that. That should be enough.

 

[anonymous_abc]

Thanks for the explanation! I will have to step up my game. I will try to double that. That should be enough.

One popular rule of thumb is the 4% safe withdrawal rate (SWR).
So if you have a nest egg of x$ (wisely) invested you can withdraw 4% each year without ever running out of money.

From that you can easily go backwards and say you need 25 times your annual spending invested.

So for your case you should know your annually expenses. Multiply that by 25 and that is the number you should be aiming for.

If you cannot put a number on your annual expenses the first thing you want to do is start tracking where your money is going and budget accordingly.

Obviously overall it's more complicated than that but it's a good estimate to get started.

If you are serious on wanting to retire early consider browsing http://www.mrmoneymustache.com/
particularly
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/