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Here's a question for anyone who's familiar with investing. I currently have a student loan balance of about 9k being repaid at about 4.2%, and I have about 14k in a non-retirement Vanguard mutual fund. Now, the Vanguard fund currently isn't exactly making money hand over fist, but I'm sort of reluctant to take out the money from the fund and pay off the loan balance. So....it makes financial sense at this very moment to pay off the loan. However, should I bank on the economy bouncing back and outgrowing the loan interest in the long term (20-30yrs from now), or should I just go ahead and just pay it off right now?
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Aug 3, 2008 15:43
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| # ¿ Apr 25, 2024 02:21 |
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Question for the esteemed assembly: What is the most effective source of additional income? This is something that has always fascinated me...basically, getting income from an investment, perhaps from dividends from the market, investing in a small business, or renting out real estate, and letting the check come in every month. So, as I asked, what would you say the most effective source is? And by effective I mean bang for your buck and ease of breaking into it. For example, renting out a former residence is nice if you can turn a profit, but it involves a rather lengthy start-up. On the flip side, making decent money from dividends involves having a rather large initial investment to get the ball rolling. Thoughts?
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Nov 24, 2008 22:47
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Speaking of investments, what do you guys think about this idea: the feds are offering a first time homebuyer credit of $7500. It's a refundable credit that has to be repaid over a 15 year period, but it's basically an interest free loan, and you dont have to start making the payments until 2 years after you take it. So I'm thinking of taking the credit and put it into staggered CD's. USAA has some pretty sweet APY's ranging from 3.4 to 5.0. I figure it's a good way to take some of the risk out of my portfolio which is basically like 95% stocks and 5% bonds right now. What do you guys think?
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Jan 1, 2009 01:08
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Okay, here's the short story -- here's the asset allocation I'm trying to achieve by next year: 40% VFORX (Roth IRA) 25% VWELX 19% VTSMX 9% NAESX 7% 401(k) (50% int'l, 25% small cap, 25% index) Basically it's built around VFORX with VWELX providing the more conservative side, NAESX and TSP providing the more aggressive side. Basically, I max out the IRA contributions, and put the rest into the bottom 3 at varying percentages. And yes this is assuming a static 10k in emergency fundage. What say you, finance wizards, is this a decent plan?
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Aug 3, 2009 18:46
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With the new year I've set up a new long-term investment plan -- save 30k every year until 2018, starting with 2011. I am a very big picture hands-off investor. I like to set a plan in motion, let it run, evaluate the outcome every year, and make any necessary changes. I wanted to bounce this plan off of you guys to get a general outside impression. It's not all for retirement (I plan on having a pension eventually), but like any smart, pragmatic human being, I want to diversify my wealth. Here it is: Mutual Funds: Vanguard Wellington (VWELX): 10k + 3.6k/yr Vanguard 500 Index (VFINX) : 3.7k + 12k/yr Vanguard International Growth (VWIGX): 3.4k + 3.6k/yr Vanguard 2040 Fund Roth IRA (VFORX): 20.6k + 5k/yr Stocks: (+4.8k/yr) Aerovironment (AVAV) @ $350 Northrop Grumman (NOC) @ 2.6k L3 Communications (LLL) @ 1k Vanguard Energy ETF (VDE) @ $388 What I've laid out here is what I currently have, and the yearly contribution to each fund. I usually don't play around with stocks, but I obviously like to invest in defense, and will probably continue to just because I purposely set aside extra money to throw around. With the above, my current asset allocation turns out to be: 86% stocks, 14% bonds 80% domestic -- 77% large cap, 17% mid cap, 5% small cap 20% international -- 50% europe/23% pacific/1% canada with 26% emerging markets It's only 42k which I think is pretty good for age 26 considering how I've basically been paying my own way through life since age 18. But my main question is that pouring more money into the S&P500 is a good thing, right? I like to think that trying to beat the index is dumb, so I'm just hedging my bets by putting money into the international market with VWIGX (and VFORX to a lesser extent). Meanwhile, VWELX gives me some decent bond exposure.
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Dec 5, 2010 11:55
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alreadybeen posted:Rekinom, I am in a pretty similar situation as you but have a higher percentage (~40%) international over domestic - Why should I put so much of my money into the country that just happens to be the one I live in? Well, to answer your first question, I'm way more in tune with the American economy, than I am with international ones. If I kept up with international news as much, I would probably be more comfortable sending more investment dollars overseas. But in the end you're probably right, aynway. Pram posted:I'm not really convinced going long is a sound strategy at the moment. I know this is an unpopular opinion in the long term investment thread but its looking increasingly likely that we're heading into 'lost decades' territory. Buy and Hold a Vanguard index was OK in 2006 I guess, just like buying the nasdaq was a great idea in 1999. If I was putting my money on auto-pilot the most important thing I'd be looking at right now isn't historical returns but probably dividends. VWELX doesn't even appear to pay any so I'd take that into consideration. What do you mean by lost decades, and what do you think is pointing us there? I'm curious, because it seems that the recession is over and now we're in the era of the "new normal", and that ~9-10% unemployment will be the norm, not the exception, but the market will slowly but surely go up over time.
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Dec 6, 2010 02:32
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80k posted:Putting money into the S&P500 is neither good nor bad. It's just a good vehicle for exposure to US stocks. You have plenty of US stocks through your target retirement fund. If anything, Vanguard target retirement funds are overweight US stocks. The last thing you need is to add an S&P500 fund. Get rid of it. Get rid of it because it's domestic? Or get rid of it because they're stocks? And then where do I put the new contributions? I simply don't know that much about foreign markets. If I decide to ramp up my foreign investment, should I be looking at large cap European and Pacific funds? Should I bias towards Europe or the Pacific? Or is there another market worth looking into? I come across articles about spelling doom and gloom with European countries having to get bailed out and passing austerity measures. On the other hand, is this a sign that they're smart enough (way smarter than the U.S.) to fix their economic problems, and it's a good time to buy now?
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Dec 7, 2010 21:47
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80k posted:you don't need to add the S&P500 fund because you have US broad market exposure in the target. Just spread it across the rest of your investments if you want or add to your international. Total International Index fund is the best way to get international exposure. Add FTSE Small Cap ex-US for small cap international if you want. I'm thinking of the FTSE Small Cap, but what are your thoughts on the Emerging Markets Stock Index Fund (VEIEX) instead? A lot of it depends on China, I suppose, but if that's where the money's at...
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Dec 7, 2010 22:07
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Okay, guys, I need some help because I keep trying to figure out the answer to this, and a million different websites tell me a million different things. This is related to stocks, rather than mutual funds. But I'm just trying to figure out how to tell if a company is in good shape or not when it comes to value investing. There are metrics that make sense to me, such as P/E, operating margin, 52-week high/low, debt-to-equity ratio, and a bunch of other poo poo. But it's hard to take all these individual stats and interpret them to mean that a company is undervalued but with strong fundamentals and stats, or well-run, or whatever. For the long-term, of course. I'm talking like 20-30 years. Rekinom fucked around with this message at 13:49 on Dec 14, 2010 |
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Dec 14, 2010 11:36
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I just have a simple question, nothing too cosmic- Every month I contribute this: 500 to VWIGX (large cap int'l) 500 to VFSVX (small cap int'l) ($5000/12) to VFORX as a Roth IRA 1000 to VWELX My investment strategy is simple, I put away about 2500 a month, 1000 to international equities, and 1500 towards more conservative, domestic equities (although I'm aware that VFORX has some int'l exposure also). Current total allocation is 50% domestic/33% int'l/14% bonds/3% cash. I can't shake the feeling that I should split that 500 between the two international guys, and feed that other 500 into an S&P index fund. I've been getting my rear end kicked on the international stocks, while the domestic stocks have been bouncing back nicely. I'm definitely not going to pull out of them, but rather just adjust where I put my monthly contributions. But back to the question at hand -- is Europe simply undervalued, or is it turning into a bad choice for the long term? Should I pack it in and root for the home team?
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Sep 14, 2011 00:27
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I happen to have about 10-15% in bonds, but then again I also happen to be 40% international with my equities. I don't know, my time horizon is the same as everyone else's, but I just disagree with the 100% STOCKS WHOOOO LET IT RIDE philosophy. Diversification and all that, I guess. I like the idea of having multiple vehicles making money at different rates, but with the volatility skewed to suit the time horizon.
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Oct 2, 2011 17:41
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Okay, I have an uncommon question regarding savings... What I want to do is establish a side account that's conservative in terms of risk, but will yield me more than a money market would. It doesn't need to be very liquid, either. I want to kind of use it for seed money for a future endeavor, the timing of which can't be predicted. So basically, I need to invest like a retiree who's going to be withdrawing their money anytime in the next 4-10 years. Right now, I'm thinking of sinking it into Vanguard's TIPS fund (VIPSX), or Vanguard's Total Bond Fund (VBTLX). The TIPS seem to be yielding more than the bond fund, but I can't necessarily tell if one has more risk, or if the TIPS beating out the Bond fund is something that's likely to continue over the next 10 years. Or maybe there's an investment out there that I'm completely overlooking. Can someone with more knowledge of treasury/bond investing help me out on this?
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Dec 4, 2011 00:52
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greasyhands posted:You can get 3-5 year CDs that yield north of 2%, which is terrible but if you don't want to risk the principal you aren't going to get much return right now. Well, it's not that I want 0 risk.... I just want a conservative near term investment vehicle.
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Dec 4, 2011 19:32
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I'm toying with the idea of getting a CFP, because my portfolio is starting to get big enough that I'm getting genuinely scared of loving it up as an amateur. How does one search for a CFP? What kind of credentials do you guys recommend? And how much do they usually charge? All I've heard is that I should get a flat fee advisor since they won't be apt to recklessly maximize their profit. Finally, I live overseas, so going local isn't going to do much good for me -- I need someone I can communicate with from around the globe.
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Jul 18, 2013 23:45
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Sorry if this is longer than it needs to be, but it's part technical, part philosophical. I've been throwing around an idea that's mostly retirement related, but seems kind of a novel thing that most people like me never really do. I'm thinking about eventually starting a family bank. Not an actual bank, but rather a family trust combined with an LLC. The idea behind this is rooted in the financial practice I've had all my life of "don't spend money you don't have"'. I won't bore you with the details of my portfolio, but I'm 29 with zero debt and far more retirement savings than average people twice my age. If I end up banking a military pension that pays out at 60, I can probably survive off of that (house paid off/healthcare heavily subsidized). I'll be flush with a bunch of retirement cash I don't need. Conventional wisdom says leave it to your kids, right? But if I don't kick the bucket for another 30 years after, that doesn't help anyone pay for college, buy a house, or start a business. Not to mention, I plan on acquiring a bit of property along the way...rental houses, side businesses, things like that. The best part is, if I don't feel like running the business or the kids don't want to take it over, I just liquidate and put hth money into the trust. Anyway, my plan is to organize the businesses and real property under an LLC, and then organize a portion of the retirement assets under a family trust, with myself as the trustee, and the family members as the beneficiary. This is something that rich people do, but, gently caress it, why can't i do it too? In this case, the kids borrow from the trust at zero interest, and contribute back to it in kind. If I die early, then my life insurance pays into the trust. They have the capital to pay for education, pay for a house, pay for weddings, all that poo poo, without ever going into real debt. If they start a business, the trustee reviews the business plan, and the LLC either loans the money, or takes a partial or whole equity stake. I realize this will take some pretty heavy indoctrination on my part, but I'm for the challenge. This is an idea that I've been kicking around for a while. One of my primary goals in life is to have a family and eliminate financial insecurity forever. That way they (and their kids, and their kids' kids, etc) can major in some bullshit humanities or social science degree and not actually need to work any more than they want to because the interest on the trust is compounding so much that they will never need a loan. It's like being old money, except you're still solidly middle class. Just wanted to see what others thought of this insane idea.
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Apr 4, 2014 06:22
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| # ¿ Apr 25, 2024 02:21 |
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Uranium 235 posted:First, estate planning is not a crazy idea. It's a normal and good thing to do for anyone who plans on dying with assets. With that said, you might be putting the horse before the cart. Do you have a family yet? I am putting the cart before the horse here, but only because I'm making a few major life changes soon and I would prefer to lead turn a lot of this poo poo and cash in on "dat compound interest" rather than leaving it as an afterthought when I'm 60 and getting raped by taxes every time I transfer assets. Also, it helps to know what is community property and what isn't. Good point about the LLC stuff, I'm 100% going to be in contact with a lawyer and accountant before I ever get into that stuff. This is all rather conceptual at this point.
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Apr 4, 2014 15:34
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