Hi all,
I've been obsessing over the idea of FI for the last few weeks, and feel like I've already been prepping myself unintentionally for this goal for a while. I'm naturally frugal, and have been saving close to 40% of my income as a IT Consultant for the last 2 years. Today I made the next big step by paying off the last of my student debt (didn't have much to start with luckily).
Now that I'm debt free, I'm ready to start investing my nest egg, but am having trouble pulling the trigger on where...
My plans so far are as follows:
I would like to be FI in the next 10-15 years. Plan to increase my contribution to 50-60% or more of my income while reducing spending.
Current Holdings:
10K - High Yield Savings Account - (Emergency Fund)
4K - Checking - (For bills and cushion)
40K - Taxable Investment Account - (Where???)
8K - Simple IRA - (through a broker employer selected)
For the taxable account, I'm thinking of a 80/20 allocation because bonds essentially offer no return except to cover inflation right now. Unless I'm misguided on that?
I've been reading MMM and Bogle's Bogleheads book, I understand the concept of index funds, but is a single index fund like the vanguard VTSMX really enough to be considered diversified in the stock portion?
I looked at Betterment's portfolio diversification and they utilize a bunch of different stock index funds, including international. I've debated opening an account with them just because of the diversification they are willing to "manage" and for the auto reallocation and easy to use goal tracking and splitting. Thing that is keeping me from doing that is their fees. Would rather do it myself if I can decide on a direction... and what about bonds? I feel like I hardly read about diversifying this area of a portfolio...
As for my Simple IRA, I'm thinking of investing those funds into a Vanguard Target Index Fund to make things easy for me. But does this cover both Stocks and Bonds? I'm even less sure on what exactly to do for this longer term account...
So any suggestions? Links to straight forward information? I kinda feel like I've overloaded myself with information while researching, and need some help putting on blinders to begin. I'm at the starting line, ready to go, but can't seem to focus on where to take my first step.
Thanks in advance to all!
