Author Topic: Vanguard. NOW WHAT?  (Read 4466 times)

CrewDallahan

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Vanguard. NOW WHAT?
« on: January 24, 2015, 01:31:55 PM »
I opened a Vanguard account. NOW WHAT???

I'm 25, my wife is 23. We are starting our Mustachian journey. Thanks to advice from senior Mustachians we have come up with a detailed 10 year plan that will increase our savings so we can "RETIRE" EARLY or at least be way better off than if we did nothing differently. It's realistic that within a year I could start contributing between $500 and $1000 a month to investments. The problem is: I don't know what I'm doing!

I'm choosing Vanguard over American Funds. WHAT ACCOUNT SHOULD I START? Roth IRA???

As I understand it Roth IRAs have a maximum annual contribution of $5500 = $458/mth
But I want to contribute MORE than that.
What is the best way for a guy like me to accumulate wealth by investing over a 10 to 20 year term?

M from Loveland

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Re: Vanguard. NOW WHAT?
« Reply #1 on: January 24, 2015, 01:39:02 PM »
Hi!, I'd recommend you to read Jim Collins' stock series:

http://jlcollinsnh.com/stock-series/

I learned a lot about investing, type of accounts, and a bunch of more stuff. Really good stuff, hope he writes the book soon, gonna be one of the first one buying it.

Enjoy!!.

kpd905

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Re: Vanguard. NOW WHAT?
« Reply #2 on: January 24, 2015, 01:40:20 PM »
Well you can do $11,000 a year between you and your wife.  Do either of you have access to 401ks?

Nothlit

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Re: Vanguard. NOW WHAT?
« Reply #3 on: January 24, 2015, 02:36:48 PM »
The JLCollins link is a good one. I've also found the Bogleheads web site to be very helpful as I've learned more about investing over the past few years.

Generally the recommended order for investment contributions is:
  • Retirement account at work (401k/403b/etc) -- at least enough to get the maximum employer match
  • IRA (Roth or Traditional)
  • Other types of tax-advantaged accounts, if desired: HSA, 529, etc.
  • Taxable account

health teacher

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Re: Vanguard. NOW WHAT?
« Reply #4 on: January 24, 2015, 02:46:22 PM »
Bogeheads is a great forum. I need to read it more before I give investment advice in this forum :).

Edited to remove my false info!!

With Vanguard you can select a target retirement fund. I chose 2050 simply because it is more aggressive than say a 2030 target retirement fund.
 
Go to bogleheads and read the forums and check the wiki.
« Last Edit: January 24, 2015, 02:54:32 PM by health teacher »

kpd905

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Re: Vanguard. NOW WHAT?
« Reply #5 on: January 24, 2015, 02:49:02 PM »
Bogeheads is a great forum.

You can contribute up to $17,500 per year to a traditional IRA.

I think you mean 401k.  And the limit for 401ks is now $18,000.

Nothlit

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Re: Vanguard. NOW WHAT?
« Reply #6 on: January 24, 2015, 02:54:07 PM »
The JLCollins link is a good one. I've also found the Bogleheads web site to be very helpful as I've learned more about investing over the past few years.

Generally the recommended order for investment contributions is:
  • Retirement account at work (401k/403b/etc) -- at least enough to get the maximum employer match
  • IRA (Roth or Traditional)
  • Other types of tax-advantaged accounts, if desired: HSA, 529, etc.
  • Taxable account
Addendum: looking at some of your other posts it sounds like you are at least somewhat self-employed. In that case, you may want to look into things like Solo 401k and SEP-IRA (I have no experience with those; just know they exist and are geared toward self-employed people). It's probably worth a visit to an accountant or someone who is certified to provide tax advice -- there may be ways you can structure your business that would be advantageous to your goals.
« Last Edit: January 24, 2015, 02:56:34 PM by Nothlit »

waltworks

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Re: Vanguard. NOW WHAT?
« Reply #7 on: January 24, 2015, 05:08:50 PM »
As your tax burden should be basically zero as it is (according to the info from your other thread), max out a Roth IRA for both you and your wife each year. If you have money beyond that, you can open a 401k for your business and contribute to that.

-W

JasonK

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Re: Vanguard. NOW WHAT?
« Reply #8 on: January 24, 2015, 07:47:02 PM »
When you ask "What is the best way for a guy like me to accumulate wealth by investing over a 10 to 20 year term?" are you referring to Vanguard investments, or investments in general?

If your goal is early retirement, then obviously you're going to need access to investments (or the cash flow from those investments) in the intermediate years when you can't access your tax advantaged accounts (or social security).  I know... there are some strategies for accessing these funds early but let's set those aside for the moment.

It seems the favorite investments for the ER crowd include taxable Vanguard funds, dividend stocks, and real estate.  My personal choice is Vanguard and residential / commercial real estate, but that's me.  There are a lot of resources out there on each of these classes.

If you've maxed out your retirement accounts and just wish to plow more money into Vanguard, I might suggest reading "Gone Fishin Portfolio" in addition to JL's blog - the book strongly pushes Vanguard funds, and lays out an allocation methodology slightly more complicated than JL's.  I found some of that useful, but there's nothing wrong with steering towards Jim Collins simple approach.  Still, an educational read if you're just starting out.

Finally, you may also want to consider Betterment for your taxable accounts if you want to keep things simple and let them worry about allocation