What can I do better? :-/

[MustacheBeginner]

Hey everyone,

I think I am doing “not the worst possible” but I still have the strong feeling there are things I can do much better in terms of investing my money and hopefully one day being able to buy a house here in Los Angeles when the market turns into a sellers one (ever again?).

I have the feeling I am standing still in my progress towards financial independence as the index funds I own have been pretty volatile recently (can be I just need to learn more long term thinking). Also I suffer a lot from “bag man” I think it is called when you are always afraid you lose everything. On top of that it feels like everyone else is doing much better of course.

Here is where I am right now:

$215K @ 75% Stocks - 25% Bonds in Betterment / $250 a week contribution
$90K in a Vanguard Money Market Fund (don’t feel comfortable having ALL in betterment)
$42K in cash for monthly bills and potential emergencies.
No debt.
37 years old.
2 person household, single income.
EDIT: $150.000 to $170.000 annual income

I really don’t spend much money on myself, drive an okay 10 year old car I like  and my hobbies are pretty much covered already equipment wise.

I am trying to build small passive income streams which make me maybe $400 a month average right now so far, hopefully more soon.
Fix cost here in LA are a bit crazy which is at some $6000/month. $2300 rent, $1000 to support my studying fiancé and the rest is car, groceries, dogs, health insurance $500/mo, some necessary subscriptions etc.

Any advice what can be done?
I’ll go through my monthly expenses in detail again to see if something can be axed but I don’t think that will be too much.

Should I move even more into index funds even though it feels like the 9 year bull run slowed down by a lot?
If I have all in the market, it’s kinda locked in a bear market and I can’t use it for a down payment in the following sellers market.
It’s tricky for me here, it is “give every dollar a job” VS “cash is king in bad times”.

Every day I am thinking about what else can be done or done better but it feels like I can’t figure it out :-/

Cheers and thanks a lot!

[2Birds1Stone]

First off, a sellers market is what you are experiencing right now. You want a buyers market, if you're in the market for a house.

Additionally you didn't list income.

$6,000 expenses per month are rather high, even for a HCOL area. You have a decent asset pool for your age, is your income very high? Have you calculated your net savings rate?

If you're making $250k/yr then maybe you're in good shape on the future asset growth. If you're pulling in $100k and outflowing $6k/month you won't be FI very soon.

[MustacheBeginner]

Oh yeah my mistake, buyers market of course.
My annual income is between $150.000 and $170.000.
Take home is around $7500 a regular month so yes, savings rate isn’t that great unless I do overtime which makes a big difference but the overtime can’t be justified all the time here at work.

I really have to see how to get those fix costs down.

Savings rate is 20% then.

[2Birds1Stone]

Post a detailed breakdown of that $6k. Better yet, add a case study in that section of the forum!

[MustacheBeginner]

Ok will do that when I am home from work. Thanks for the tip!

[maginvizIZ]

$90k in a money market account?  wtf?
$42k in cash for bills?  what... the... fuck?


You have $132k in cash equivalents? 38% of your portfolio is cash?  Who are you?  Get that shit working for you now!


Investment options
fundrise.com (private real estate)
prosper.com or lendingclub.com (peer to peer lending)
VNQ (Vanguard REIT Fund... public real estate
Cryptocurrecy (Bitcoin, LiteCoin, Monero, etc).




Remind me why you don't want it all in betterment?  Do you understand what betterment is?


Sorry if this sounds harsh.  I almost fell off my chair seeing so much cash sitting idle, being eaten away from inflation.  There should be flashing red lights and sirens going off in your house regarding the cash sitting away. Everytime you look at your portfolio, you should hear sirens.

Just a nice, loud siren. :)

[MustacheBeginner]

Haha thanks for the sirens! :)

Yes right now I have that amount in cash as I am not fully sure what exactly to do with it.
I am a relative conservative investor so bitcoin is not an option for me. I did some research about the realty mogul and others and am still debating if it is the right thing for me. I might put some )25K max into it once I checked the recent return rates and how quickly money can be pulled out.

How is your experience with lending club and fundrise?
How much you have in these and what were your return rates?

The reason why I don’t have it all in betterment is that I think the bull run is coming to an end and in general I don’t feel comfortable having it all in the market.

You are clearly the “give every dollar a job”-guy which I would be too until the “cash is king in bad times” made a lot sense to me as well so I can buy cheap when everyone else is scared and prices are low.

[2Birds1Stone]

I would be wary of Lendingclub, simply based on the many threads/experiences shared here over the past few years.

Crypto as an "investment"? Ya, no.

[maginvizIZ]

Ha. Yeah you caught me. I'm an aggressive investor... AT LEAST.... You can get 2% APR

https://www.doctorofcredit.com/high-interest-savings-to-get/

[ender]

Post a detailed breakdown of that $6k. Better yet, add a case study in that section of the forum!

Yeah.. excluding rent, fiance, and insurance, OP is still spending $2200/month.



Also OP, people have been expecting the end of this market for years now. You just never know.

[MustacheBeginner]

Will have to make a detailed breakdown of my spending on the weekend, work hours went through the roof last night.

I noticed I am spending a huge amount on restaurants (lunch break and nights out) as well as Starbucks. Those two will be axed for sure and I will start preparing food at home for work. That’s gonna save me some $500 a month yikes!

2birds1stone: going to read up more on lending club.

Ender: what’s OP? I’ll find out this weeekend in detail what is making up those $2200


How high is your savings rate?

Thanks for all the input!
Andre

[FIRE 20/20]

If you haven't already, I strongly recommend reading JLCollinsNH's Stock Series.  I think most of the mistakes you're making and the attitude shift that he describes will benefit you greatly. 
http://jlcollinsnh.com/stock-series/

[MustacheBeginner]

If you haven't already, I strongly recommend reading JLCollinsNH's Stock Series.  I think most of the mistakes you're making and the attitude shift that he describes will benefit you greatly. 
http://jlcollinsnh.com/stock-series/

Hi FIRE 20/20!

Thanks a lot for the link to those great articles and I started reading through those. In article V i stumbled upon this:

"So that’s it.  Three simple tools.  Two Index Mutual Funds and a money market and/or bank account.  A wealth builder, an inflation hedge, a deflation hedge and cash for daily needs and emergencies.  Low cost, effective, diversified and simple."

That makes me think that my current path doesn't seem to be too far off from this. I have stocks and bonds (75/25) as well as 90K in the money market fund so I have cash to buy cheap once the market goes down and some cash on my bank account for bills and immediate emergencies that might come up (like my recent $4500 car repair). But maybe some amounts need to be shifted a bit.
I keep on reading the rest now and looking forward to learn from them.



As I am going more through my expenses of the last 6 months I am discovering more things that can be axed. Wall Street Journal subscription $35/month will go too.
 
The current month is going to be my little experiment in which I move restaurants, Starbucks and other riffraff that adds up down to zero and see how this month turns out in the end. I also spend a good amount on random gifts for my fiance :-P
Once this experiment is done I do a case study that shed the obvious low hanging fruits already.

I'm pretty excited and I wish I had started this years ago...

Cheers
Andre