Author Topic: Advice - How to invest windfall of cash, and how to find out return rate?  (Read 2207 times)

jeastith

  • 5 O'Clock Shadow
  • *
  • Posts: 40
  • Location: Philadelphia, PA
Just learning about investing, so looking for some advice. 

My husband and I are about to sell the house we lived in for 3 years for a nice little profit.  After realtor fees and transfer tax, we should walk away with a $125K check, which feels awesome.  We are already have some investments in VFINX and a Vanguard 2050 retirement fund, but I'm considering changing these investments because we now plan to retire WAY before 2050 and when we made these investments, we didn't really know what we were doing.  Truth be told, we still don't really have a solid feel for this, but that's why I'm writing this email.  Book and article recommendations welcome! 

We've got two debts right now - $10,000 on a car loan, which we are definitely paying off as soon as we get the check, and our mortgage.  We've agreed we don't want to pay off our mortgage early since it's a 15 year with a 3.125% interest rate.  We think we can do better investing in the market. 

Since we're new-ish to investing, which Vanguard accounts do you recommend?  And also, how do you find out what your annual rate of return is on those investments?

Thanks!  Jeannie 

forestbound

  • Stubble
  • **
  • Posts: 248
  • Location: midwest
Congratulations and best of luck!

Start with Jim Collins "Stock Series", it's easy and makes a lot of sense. Or go to bogleheads.

http://jlcollinsnh.com/stock-series/

https://www.bogleheads.org

tdogz

  • 5 O'Clock Shadow
  • *
  • Posts: 19
...  And also, how do you find out what your annual rate of return is on those investments?
I use the spreadsheet found here... http://www.bogleheads.org/wiki/Calculating_personal_returns

I keep 4 spreadsheets actually (because I'm a data nerd) - one each for my 401(k), Traditional IRA, Roth IRA & a fourth that is a total of all of those accounts. I'm going to start one for my wife's IRA and one for our joint taxable investment account too. You could do this to track your return on a single stock or mutual fund too.

It is pretty straight-forward (enter your monthly contributions, withdrawals, and ending balance) and it is available in Excel and Google Docs formats.

Here is a thread on Bogleheads discussing the spreadsheet... https://www.bogleheads.org/forum/viewtopic.php?f=10&t=150025

Mighty-Dollar

  • Bristles
  • ***
  • Posts: 384
Since we're new-ish to investing, which Vanguard accounts do you recommend?  And also, how do you find out what your annual rate of return is on those investments?

Thanks!  Jeannie
Investing is easy and uncomplicated. Decide how much risk you want to take then invest in as little as 2 index funds -- a total bond market fund and a total stock market fund (or S&P 500 index fund). I invest in AGG and VOO, then rebalance as needed to maintain my bond / stock allocation ratio. Whatever you do, avoid the sharks out there if you need help. That means go to NAPFA.org and find a fee-ONLY fiduciary adviser! But again investing is easy.

DavidAnnArbor

  • Handlebar Stache
  • *****
  • Posts: 2176
  • Age: 54
  • Location: Ann Arbor, Michigan
You can also find answers to topics by searching this forum using google.

I go to google and in the search box I type http://forum.mrmoneymustache.com/investor-alley/  asset allocation

This google search brings up a whole lot of threads on asset allocation that could be useful in deciding how to invest.  You can substitute asset allocation for any other keyword you choose to help you search.
« Last Edit: May 05, 2015, 07:14:44 PM by DavidAnnArbor »

innerscorecard

  • Pencil Stache
  • ****
  • Posts: 590
    • Inner Scorecard - Where financial independence, value investing and life meet
There is no way to find out an annual rate of return on stock investments. You can only estimate what it might be based on past returns. But that is a guess at best.

It is NOT like putting money in a savings account.