Author Topic: Changing investment priorities - advice?  (Read 1313 times)

Dollar Slice

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Changing investment priorities - advice?
« on: June 22, 2015, 11:40:25 AM »
For the last 8-ish years I've been slowly adding to what I thought of as a "down payment fund," where I'd put extra money (after funding my retirement account). I have about $30k there now. About 9 months ago I moved to Manhattan, which I absolutely love, but it puts future home ownership in a different perspective. I don't want to buy in NYC for a lot of reasons. Things may change, but I'm not sure I ever will want to buy a home here. But I do plan to live here a long time, so the life plan is now "renting for the foreseeable future," I guess.

Anyway, I've now got a $30k taxable fund that I don't really know what to do with. Added to that, I will likely be getting a $75k-$100k windfall in the next couple of years to add to it. I've had it in a municipal bond fund which I thought was both tax-efficient and within my risk tolerance for the short-to-medium-term plans I had. But now... it's a sort of unknown thing, I don't know what it's for or when I'll need it (retirement? down payment 10 years down the road? going back to school?), so I'm having a hard time deciding what to do with it. Throwing it all in a stock index feels too aggressive, keeping in all in the bond fund seems too conservative. And as it becomes a larger % of my net worth, with the anticipated windfall, I don't want to keep it all in one basket, as it were.

What would you do with a bunch of money for an unknown purpose?  I want to keep it at Vanguard with my IRAs, but otherwise I'm open to suggestion. I was thinking of something like 30% VNYTX and 70% VTSAX... but it feels pretty arbitrary. So I thought I'd ask for some hive-mind opinions ;-)

MDM

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Re: Changing investment priorities - advice?
« Reply #1 on: June 22, 2015, 12:04:23 PM »
What tax-deferred options do you have (e.g., 401k, 457, tIRA, etc.) for your income and are you maximizing those?  If you have options you are not using fully, you could do so and use the $30K to replace lost income.

In other words, what is your overall financial picture and how does this part fit?

Dollar Slice

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Re: Changing investment priorities - advice?
« Reply #2 on: June 22, 2015, 12:31:41 PM »
Unfortunately I already max out an IRA every year and do not currently have access to a 401k or similar, so my tax-advantaged options are pretty limited. I work at a very small business that just started up about a year ago. I'm not sure it's feasible to have a 401k for such a small group (less than 5 people would be eligible). I had one at a previous small biz I worked for and the fees were awful.

My other assets...

Roth IRA: $104k ($85k stock indices, $12k REIT, $7k "play money" which I invest in individual stocks, non-index ETFs, etc.)
Trad IRA: $82k (all stock indices)
Cash: ~$10k

Dollar Slice

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Re: Changing investment priorities - advice?
« Reply #3 on: June 29, 2015, 02:54:42 PM »
Well, in lieu of any advice here, I decided to move about 20% of the bond fund into some stock indices today, I figured the biggest single-day market drop in years was as good a time as any ;-) I'm not usually a dollar-cost-averager but it's so volatile at the moment I figured I'd hold some back.