Author Topic: Reader Case Study - Where Should I Invest Next?  (Read 1656 times)

KurtBikes

  • 5 O'Clock Shadow
  • *
  • Posts: 11
Reader Case Study - Where Should I Invest Next?
« on: January 20, 2014, 03:02:58 PM »
Reader Case Study - Where Should I Invest Next? I live in NYC and highly doubt I will be able to afford to buy an apartment in a neighborhood that I like.

Current income: $70,000 salary, take home is $3520/month

Current expenses:
Rent: $600 (split $1200 with my girlfriend)
Student Loan: $115 ($12K of $30K outstanding, 2.88% interest)
Haircut: $20 after tip
Giving: $15 per month
Internet: $20 per month
Cell phone: $85 per month (considering Republic Wireless for $19 per month)
Subway: $40 per month (I bike mostly)
Groceries: $250 per month
Out and about: $200 per month
Savings: goal of $1500 per month through June then max out Vanguard IRA after that ($5,500/year)

Assets: $17,000 in savings account and looking to invest $10K ASAP; Vanguard Targeted Fund (Roth IRA) with $4,000; very good credit (over 830).

Liabilities: $12,000 in SL with 2.88% interest…began with $30K in debt after undergrad and no credit card debt.

Specific Question(s): I finally opened a Roth IRA when I turned 30 in 2012 but have only invested $4,000 to date. I plan to max out the IRA and would like to get thoughts on where to invest the extra cash. I like Vanguard and the online recommendation from their site is the Vanguard Life Strategy Growth Fund (6-10 years or 11-15 years). What do you think of this mutual fund and has anyone bought real estate in a city other than where they live?

Thanks!

Thegoblinchief

  • Guest
Re: Reader Case Study - Where Should I Invest Next?
« Reply #1 on: January 20, 2014, 03:14:24 PM »
Unless your income rises appreciably, I'd probably max the Roth first, then the 401(k), then any extra can go to a taxable account.

If you're going the "easy" way, any taxable funds would go into Vanguard Total Stock Market fund (US and Int'l).

An alternative is funding retirement via dividend income. Number of good blogs, including Dividend Mantra and Dividend Growth Investor. I'm leaning that way myself, since dividend income is much safer than relying on capital gains.

I'll let others chime in on real-estate but I'd personally avoid it. If you want real-estate for diversification, buy into some REITs.

KurtBikes

  • 5 O'Clock Shadow
  • *
  • Posts: 11
Re: Reader Case Study - Where Should I Invest Next?
« Reply #2 on: January 20, 2014, 03:18:19 PM »
Thanks TheGoblinChief! No 401(k) at the office. I work for a small nonprofit organization.