Hey, I just joined- I found this place by looking up Betterment, and there is so much information here! I occasionally read articles regarding money, investing, and retirement accounts, but I have yet to start investing. I know that it's best to start sooner rather than later, but due to my lack of knowledge in this area and the resulting overflow of information, I have hesitated on investing thus far, but I am now ready to start! Betterment seemed like just the thing for me, and I was going to learn more about it and open an account, but after reading about the fees and learning the existence of Wisebanyan and whatnot, I am again paused on my road to investing. Furthermore, I have other questions that I hope someone would be able to answer.
Background info:
I am 25, and live in California. I left my permanent job to pursue other opportunities, and as such, there are money decisions I will have to make. In my current position, I am making $80k a year, but it's just a temporary position that is set to end in 2 more months. I averaged $672 per month in expenditures in 2014 and I am averaging $693 per month this year, most of it is going to rent, and I don't have any outstanding debt.
Company Stock:I participated in my previous company's ESPP, and have around 20k sitting in the E*Trade account that was set up for it. I have to take action on it within 2 years- I can choose to sell the shares or transfer them to a personal account. It pays out dividends at around 5.4%, which I have elected to reinvest. Should I just sell these shares now, move them into another account, or do something else with them?
401k and IRA:I contributed towards the company's 401k, and have around 16k in the account- 100% of which is put towards Vanguard's 2050 Retirement Fund. Should I leave it sitting it its current account, roll it over to a traditional/Roth IRA, or wait until I am employed as a permanent employee and roll it over to the new 401k? Furthermore, I have yet to start putting money away in an IRA account myself. If I rollover the 401k to an IRA, can I still contribute?
Investing:Lastly, I keep a balance of $0 in my checking account and I have around 85k sitting in my CapitalOne360 savings account. Originally, I was going to buy a property after getting enough for a downpayment and rent it out at the advice of my parents, but now that I don't have a predictable income to make house payments, I'll have to put that money to use another way. After reading the posts
here, I have concluded that my top choices are: Betterment (0.25% fee for me), Wisebanyan, or a Vanguard account. I plan on doing a lump-sum deposit of around $80k or so, and I probably won't interact with the account very often except for manually depositing more funds into the account. I've read about different allocations, and right now I'm planning on going with around 55% domestic, 35% international, and 10% bonds, but not sure which index yet. I plan on always leaving around 5-10k for emergencies, and I don't plan on touching the investment for many years.
Accounts:I see that some places offer bonus money to start an investment or IRA account with them, but I assume that I will lose more than I gain in the long run due to fees for some of them. If I can have my 401k, IRA, and investment accounts in one place, that'd be ideal. I am probably better off just opening an account and just funding it instead of fretting about which account and which index, but being picky with open accounts is just how I am, and that's why it's taken me this long to get my feet wet with it.
What do you think I should do? Is more information needed? Thanks for reading!