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Learning, Sharing, and Teaching => Investor Alley => Topic started by: ConcernedMustachian on February 10, 2019, 11:11:31 AM

Title: Any Reason Index Funds is NOT the Way to go for high income earners?
Post by: ConcernedMustachian on February 10, 2019, 11:11:31 AM
I'm in a career field where I essentially live off of my salary, but some years are able to earn quite a bit more than that figure (this year looking like 4X-6X that number potentially based on my performance). I work long hours, but the reward is worth it and spending time on anything outside of this work would not yield the same return financially.

Outside of maxing out 401Ks is there any compelling reasons not to put a lot of the excess funds in index funds? I am not handy, at all, so buying real estate for rental properties is not all that appealing, but I know a lot have chosen this path.
Title: Re: Any Reason Index Funds is NOT the Way to go for high income earners?
Post by: waltworks on February 10, 2019, 11:21:38 AM
RE makes no sense if you don't have time to invest as well as money.

If you have a bunch of money sitting around, yes, put it in index funds.

-W
Title: Re: Any Reason Index Funds is NOT the Way to go for high income earners?
Post by: ConcernedMustachian on February 10, 2019, 11:28:47 AM
I would also add, contrary to many on the forum, RE is not a priority for me now as I really enjoy my career. My main priority now is accumulation through a career I enjoy and maximizing those funds.
Title: Re: Any Reason Index Funds is NOT the Way to go for high income earners?
Post by: tralfamadorian on February 10, 2019, 11:46:00 AM
I work long hours, but the reward is worth it and spending time on anything outside of this work would not yield the same return financially.

...buying real estate for rental properties is not all that appealing...

You have already answered your own question. Real estate is a great investment vehicle and properly chosen can accelerate your path to FIRE but it takes significant time and self-education, particularly in the beginning.
Title: Re: Any Reason Index Funds is NOT the Way to go for high income earners?
Post by: COEE on February 10, 2019, 11:53:55 AM
It may be worth considering investing in REIT's which are primarily commercial market, but would give you exposure to the real estate market if you're not already exposed through your own home or if your home is a small percentage of your NW.
Title: Re: Any Reason Index Funds is NOT the Way to go for high income earners?
Post by: soccerluvof4 on February 10, 2019, 12:00:39 PM
I would pile what you can into index funds with some reits and just forget about it. Obviously first make sure you have a reserve account to cover 3-6 months of living. I prefer two years but thats not the norm around here people like to sit in cash. Whatever helps you sleep at night. But I think your the perfect candidate for Index funds as are most. Diversify within them.
Title: Re: Any Reason Index Funds is NOT the Way to go for high income earners?
Post by: waltworks on February 10, 2019, 05:16:15 PM
A lot of broad index funds already have some REITs in them, so you don't particularly need to go buy more unless you're specifically looking for more RE exposure than that. VTSAX, for example, is about 3.5% RE as I recall.

-W
Title: Re: Any Reason Index Funds is NOT the Way to go for high income earners?
Post by: BicycleB on February 10, 2019, 06:14:00 PM
Indexes good!

VTI - good per MMM:
https://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-stock-market/

VTIAX - good for adding international component.

VBILX - good for adding bond component, helps portfolio if stocks and your high income dip at the same time.

These are just examples; research carefully, act accordingly. You can do this.