Author Topic: My Financial Plan—Advice?  (Read 1897 times)


  • 5 O'Clock Shadow
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  • Posts: 46
  • Age: 31
My Financial Plan—Advice?
« on: January 30, 2014, 02:45:21 PM »
Hello everyone.  I'm a long-time reader and lurker looking for some advice regarding my investment strategies and my overall financial plan.  Here's an in-depth background and overview of my situation:

Age: 26
Annual Taxable Income (Pre-Tax): $38,000—$38,500
Annual Non-Taxable Income: $36,000—$38,250
Combined Income: $74,000—$76,750
Filing Status: Single, 2 Exemptions

Type: Roth
Company: Vanguard
Balance: $4,541.49
Contributions: $4,000
Holdings: Vanguard Target Retirement 2055 Fund (VFFVX)
Allocation: 100%
Expense Ratio: 0.18%
(Note: I dollar cost average and contribute $500 on the first of each month.  Will reach maximum contribution limit of $5,500 on April 1st.)

Company: Merrill Lynch
Balance: $2,214.21
Contributions: 15%
Company Match: 3% (Fully vested in 5.5 years)
Holdings: GoalManager Aggressive Model (
Allocation: 100%

Company: TradeKing
Balance: $480.37
Contributions: $500
Holdings: GE, MSFT, WM

Certificate of Deposit:
Company: Ally Bank
Balance: $89,098.81
Interest Rate: 1.22%
Maturity: 2/06/2014

Company: USAA
Balance: $1,471.80

Vehicle: $12,305—$13,455 (Kelly Blue Book)
Household Goods: $12,000—$17,000 (estimate)

Current Budget:
Rent: $735
Utilities (Water/Sewer/Garbage): $65—75
Electric: $15—25
Renters Insurance: $13.90
Auto Insurance: $52.26
Auto Maintenance: $15
Gasoline: $80—$100
Internet: $24.49
Cell Phone: $39.25
Netflix: $8.74
Food: $150—$180
Other: $20—$50
Total: $1,218.64—$1,318.64

Projected Budget (Post-March 1st):
Rent & Utilities: $450—$600
Renters Insurance: $13.90
Auto Insurance: $35—$40
Auto Maintenance: $25
Gasoline: $80—$100
Cell Phone: $39.25
Netflix: $8.74
Food: $150—$180
Total: $801.89—$1,006.89

I have no debts, mortgage, children, or familial obligations.  I work in Information Technology and I'm also a full-time student majoring in the same field.  I receive free healthcare and education as part of my veteran's benefits.  My current rental lease ends March 6th, and I will be moving to a more affordable home with roommates to split the costs of living.  I also plan on selling my car which I (foolishly) bought new in 2011. 

I save and invest about 80% of my income, and I've been able to build up a decent sized nest egg over the years (especially after my income more than doubled last year).  Now that I feel I have enough saved and enough stability in my personal and professional life, that it's time to start letting my money work more for me, stay ahead of inflation, and grow.  I had been very risk-averse for many years when it came to investing, and as such, never entered the markets until last year.  I'd like to optimize my investments as much as possible in a diversified, low-cost, tax efficient, and fairly simple plan for both my retirement and brokerage accounts.  I would also like to get my money out of CD's and into something that has a much higher earning potential, like Vanguard index funds, although I'm not sure what allocation I should go toward.  Also, I was hoping to get some input on my Roth IRA and 401(k) allocations and how I can improve them.

Next January, my girlfriend will be moving in with me.  I would like to purchase a home in the next 6 years, as well as to retire from my day job (if possible).  We plan on moving to her home country where the cost of living is significantly cheaper than here in the greater Seattle area.  Considering these factors, I'm not sure if I should be contributing more into my 401(k) or maximizing it up to the annual contribution limits. 

I would welcome and appreciate any suggestions, advice, or feedback at all.  I'm excited to finally participate in this incredible community!  Thanks for your time.