Personal Investments • Novice looking for advice

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Hello all, new member here

I'm 37. I'm very inexperienced with investing and general money saving techniques. I saw a financial advisor at one point and he was pushing whole life insurance on me and it raised red flags to me. I also had friends recommend Edward Jones and the more I read about them I get apprehensive to meet with them.

Lots of red flags there.

Do NOT use Edward Jones.

Do NOT buy whole life insurance.

Do you have dependents? If so consider some low cost term life insurance.

For a quick basic education of a novice at investing I suggest reading the wiki article "Bogleheads® investment philosophy", see the link in my signature below.

MyQ:
I plan on selling my house and moving in with my gf. I don't know where to put the equity (200k) as a land purchase / home buying will be in the future (few years). I was thinking about a ladder cd? This stuff is over my head and I'm afraid of being ripped off by a banker or financial institution.

About how far in the future do you expect to buy another home?

Maybe 2 years at the earliest

I will also have a lot more money coming in monthly after my sale and will need to have a plan on what to do with it, i figured 2,800 a month. I read the general rules here and I'm going to read the bogleheads guide as a start! I like the idea of simple investing, and I kind of steer away from things I don't understand, but i want to learn and stay on the right path!

Is that $2,800 per month from employment income, or something else?

That is my monthly estimated expenses now related to my home. Mortgage, property taxes, utilities ect that will now essentially be coming in soon.

More about my personal finances.
I'm in the trades. I put 5% of my pay into my union provided Roth 401k with and hourly contribution from my employer. 12$ hr est and there is a pension plan. My 401 is about 450k right now. I keep about 10k in my checking account. I have some assets totalling 150k, no debt.

I opened a Roth Ira through vanguard a long time ago before my 401k was a Roth. There is 20k in the vanguard account, maybe that should get moved?

What is your tax bracket, both federal and state? What is your tax filing status?
24% Federal and 3.05% Indiana, single no dependents

You may want to consider traditional contributions instead of Roth contributions to your employer's 401k plan.

How much (in dollars) do you contribute annually to your 401k account? If good funds with low expense ratios are offered in your employer's plan, then consider increased contributions to the 401k.
2023 contributions were 4,656$ on my part. My employer was 20,241$. My employer contributes an hourly rate of somewhere around 12$ now I think


What funds are offered in your employer's plan? Please give fund names, tickers and expense ratios.

American Century Ultra R6 - AULDX - gross expense ratio .60%
American Funds EuroPacific Gr R6 - RERGX - gross expense ratio .47%
Vanguard Total Stock Market Idx Instl - VITSX - .03%
MassMutual Mid Cap Growth I - MEFZX - .66%
T. Rowe Price Small-Cap Value I - PRVIX - .70%

Wiki article, Prioritizing investments

I kind of want to meet an advisor in person but I want my best interests kept in mind. Thoughts? Thank you

Both Fidelity and Schwab have customer service offices in some cities. Does either have a local office in your area?

Yes, I have a Schwab nearby. Thank you so much for your help

I suggest a meeting with the local Schwab office. Unfortunately Schwab does NOT offer good rates on bank accounts or the best rates on money market funds. They can help with buying CDs.

I suggest Vanguard for the better money market rates.


Home savings
As mentioned you could reassess the idea of selling your current home.

The money intended for a home purchase in 2 years or more could be saved in federally insured CDs, federally insured high-yield online savings accounts, or a good money market fund.

For rates on CDs and savings accounts see:
1) https://www.bankrate.com/; and
2) https://www.doctorofcredit.com/bank-accounts/.

Vanguard Money Market Funds.

Schwab Money Market Funds

Fidelity Money Market Funds


401k
I suggest increasing contributions to the 401k plan. The plan offers good diversified funds to use such as:
1) Vanguard Total Stock Market Idx Instl - VITSX - .03%;
2) American Funds EuroPacific Gr R6 - RERGX - gross expense ratio .47%.

Does the 401k offer any bond funds or international stock index funds? If so please give fund names, tickers and expense ratios.

With some of your new disposable income of $2,800 per month you should increase your contributions to the 401k plan. The maximum annual employee contribution limit is $23k. The employer contribution does not count toward the employee maximum, it's extra. I suggest that you menthe maximum annual employee contribution.


Roth IRA.
What was you income your most recent federal tax return? There are income limits for contributions to a Roth IRA.

If eligible you can restart contributions to your Roth IRA with Vanguard. The maximum annual contribution link is $7k

Statistics: Posted by ruralavalon — Fri May 10, 2024 9:37 am — Replies 9 — Views 792

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