Author Topic: I need help/opinions/advices on my finances- click please! thanks  (Read 1104 times)

asianmustache

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Hi! Good day everyone. I have been reading and learning a lot of things from this site the past few month. I am glad I discovered this site.
I am a 27 year old guy with Gross salary of 80k.

Debt-free.
I also have 6 months emergency funds in my bank.
Monthly expenses would be around 1,300 ( rent, utilities, phone bill, groceries, dinner/eat out if im too lazy to cook )
max Contribution in my company's 401k.

What would be my next step?
What I have in mind is investing in Vanguard and individual stocks (dividend stocks).
Looking at VTSAX from vanguard. with individual stocks, will still do my research on the company.

open for recommendations, opinions, ideas, opportunities
Thank you!

Frankies Girl

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Re: I need help/opinions/advices on my finances- click please! thanks
« Reply #1 on: November 11, 2016, 06:09:03 PM »
Do you live in the U.S.? Assuming you do and have no plans for real estate investing, then I'd advise as follows:

Confirm you're putting in the full 18K in your company's 401k (sometimes folks say they are maxing it, but really just mean "up to the company's match" so wanted to make sure).

IRA (likely traditional, but you should research if Roth might be better for your situation): $5,500 per year allowed currently. Open the IRA with Vanguard, and invest with VTSAX.

Do you have an HSA? If so, max it.

After that, taxable is pretty much it. But as it IS taxable, only tax efficient funds in there. Open at Vanguard or Fido, and go for low cost index funds. NO bonds, no individual stocks or ETFs. https://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement

You really need an investor policy statement, and then an asset allocation and invest accordingly. But you must figure out exactly what your long-term plans are in order to figure out how you want to invest and to meet all of your goals and dreams and plan for those. It sounds like you're capable of saving/investing a HUGE amount of your take home, which means you could technically become FI (financially independent) in well under 10 years if not less - that's amazing! :)

I follow the boglehead type of investing format - simple and boring index investing. I don't care about researching companies or watching the market and trying to out-guess the next big thing. I am not sure how much research/reading you've done but you may want to check out the following to see if this type of thing makes more sense to you.

http://jlcollinsnh.com/stock-series/
^great series, available in book form or can read on his site.

https://www.bogleheads.org/wiki/Main_Page
https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investing_start-up_kit
https://www.bogleheads.org/wiki/Lazy_portfolios


asianmustache

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Re: I need help/opinions/advices on my finances- click please! thanks
« Reply #2 on: November 11, 2016, 06:29:03 PM »
Thank you for responding! Yes, I live in the US. I am also planning to buy real estate in my country(Philippines) if possible. I am really new to this investing thing that's why Im reading and learning the most out of it.
What do you mean by FI in 10 years?  Sorry if this is a dumb question.

What about individual stocks or ETFs?

Frankies Girl

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Re: I need help/opinions/advices on my finances- click please! thanks
« Reply #3 on: November 11, 2016, 08:00:32 PM »
Thank you for responding! Yes, I live in the US. I am also planning to buy real estate in my country(Philippines) if possible. I am really new to this investing thing that's why Im reading and learning the most out of it.
What do you mean by FI in 10 years?  Sorry if this is a dumb question.

What about individual stocks or ETFs?

FI is financially independent. That's what all of this is about - MMM and the early retirement thing. Not needing a job to support you either because you pay for all of your expenses through investments, real estate (landlording) or other ventures that don't require you to work if you like. Your money makes money. It works for you instead of the other way round.

That's what folks mean by being FIREd - financially independent, and retired early. The goal is to stop working if that's what makes you happy, or to keep working but not have to worry about them paying you enough to stay because you love what you do (and can go do it anywhere without worrying about making money from the job).

And no, index investing doesn't really believe in individual stocks. You hold index funds (mutual funds and ETFs can be index funds) because they are the definition of diversifying your investments. There is no need to buy individual stocks because by holding a total stock market index fund, you already own pretty much all of the stocks in the market.

If you read the bogleheads links and the Collins stock market series, you'll have a better understanding of how all of this works. And then you can start asking more questions here to fine tune your plans and then put them into action.