Author Topic: Help with long term/short term investing/retirement plans  (Read 3258 times)


  • 5 O'Clock Shadow
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Help with long term/short term investing/retirement plans
« on: October 13, 2012, 07:39:47 PM »
Hi, I just joined the site and it seemed like there was very sensible information being passed about so maybe I could get a little life advice for money.
I'm 32 and so is my wife. I have a stable job making about 50k a year. I have a company matched 401k I just started paying the full amount that the company matches into. At the moment it has about 7.5k in it. We have around 12k in savings sitting in a bank with basically 0 interest. We have no debt except a small amount of student debt we are paying off. My wife has a teaching credential but due to the California budget crisis cannot find full time work as a teacher, she is subbing and is perhaps pulling in 20k a year, no retirement or anything. We are planning opening a Vanguard Roth IRA for her for retirement, looking at either the STAR fund or the Vanguard Target Requirement fund... That we'd put about $1000 to $2000 into to get it going
Our financial hope in the near future is to buy a house, we'd like to invest our savings into something that will actually make money, at the moment it seems that even savings accounts barely pay above inflation, savers are getting screwed today, but without a stable income from her and a better downpayment we may not be able to buy a house before the housing market picks up and locks us out once more...

I guess it's actually nice to sit and type out our situation for my own benefit. It is unlikely my wife will get a stable income in the next two years, we are also at an age where we are starting to think about having kids soon... Is there a way to make those savings actually make some decent money? Or are we basically SOL due to the economy?
Thanks in advance

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  • Walrus Stache
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Re: Help with long term/short term investing/retirement plans
« Reply #1 on: October 13, 2012, 08:09:16 PM »
Without knowing your wife's educational background, is it possible for her to get a full time job in an area other than teaching?  At 32, that biological clock is ticking loudly.  However, you are going to have to balance buying a house, kids, and saving for retirement on what is a relatively modest current income in most parts of California.  Something will probably have to give until the income goes up.

Safe, accessible money means low returns.  Decent returns mean more risk.  How much risk you will want to take depends on your comfort level and your need for the money at a specific point in time. 

If I were in your shoes, I would look to increase income and savings rather than focusing on returns right now.  If your wife could find a full time job paying twice what she is making as a substitute teacher, that would solve a lot of your issues.


  • Walrus Stache
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Re: Help with long term/short term investing/retirement plans
« Reply #2 on: October 14, 2012, 06:11:24 AM »
I don't think you're going to find it easy to put down 20% on a house in California while also splitting money off in dribs and drabs for different retirement accounts. If you don't put down 20% you will get stuck wasting money on PMI or a high-interest second mortgage.

Putting enough into the 401(k) to get the full employer match usually makes a lot of sense.


  • Bristles
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Re: Help with long term/short term investing/retirement plans
« Reply #3 on: October 14, 2012, 06:34:39 AM »
Speaking as a California resident for over 20 years, I would think about leaving California. You will not have as good a quality of life here as you will have in other parts of the country.

I live in LA County and what passes as a middle class life here is the skids in most other places. It's becoming a state of haves and have nots, and most of us are on the wrong side of that.

It will only get worse as the Boomers retire and line up for their pensions. Most of your money will go to supporting an already wealthy older generation and a high-speed train to nowhere.


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