Author Topic: Figuring out where to start  (Read 1920 times)

Norrie

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Figuring out where to start
« on: June 15, 2015, 10:58:37 AM »
It's hard to admit this here, but I'm going to do it so that I can hopefully start to make some forward movement: I don't understand enough about investing to feel comfortable doing a single damn thing.

My husband and I have a 12 year age difference, which seems important in knowing how risk adverse to be. Further complicating matters, he's a professional musician and while he makes a good income from it, it's all over the map and really unpredictable. He could make six figures next year, or something could happen and the shows could stop completely. There's no way to gauge or predict future earnings. He's got a show next weekend, but until that show happens and the check arrives, we know better than to count on the income.
So large-ish age difference and unpredictable income (he's the main bread winner) are my biggest struggles in knowing what to do.

We've got an emergency fund with a full year's living expenses. I could maaaybe drop that down to six months worth, but wouldn't feel comfortable going lower than that, both due to husband's wack income and large, on-going medical bills.

No debt outside of our mortgage. We're about to sell our old house, and will give us about 20-30K to plunk in Vanguard. But into WHAT? I don't know.

Does anyone have a super dumbed down "here's where 50 year old punks should put their money" Vanguard plan? I'd really love to hear it, or any other advice that you might have.

Thanks for any help!

ZiziPB

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Re: Figuring out where to start
« Reply #1 on: June 15, 2015, 12:25:40 PM »
Hi Norrie, I'm assuming the money is for retirement (long term goals) and not for some future purchase (short term goals)?  There is nothing wrong with utilizing Vanguard Target Funds until you get more comfortable with investing.  That's what I did when I first had to make decisions about investing on my own.  I still use them even though I've learned quite a lot since then. 

As to other advice, I think you are right keeping a year's expenses as an emergency fund.  I have a steady job and keep 6 months.  It's all about what allows you to sleep at night.

forummm

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Re: Figuring out where to start
« Reply #2 on: June 15, 2015, 01:55:22 PM »
I agree that Vanguard Target Retirement Funds are a good starting point for funds that are to be used for retirement. The plan that is associated with the year the person turns 65 is a good choice. With the age difference, perhaps shoot for between the two of you.

Norrie

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Re: Figuring out where to start
« Reply #3 on: June 15, 2015, 02:00:14 PM »
The husband has a SEP-IRA through UBS that we max each year, and though the money that we'd like to invest would be for way down the road (retirement), should we look at the VTwhatevers, or just go Vanguard Target Retirement?

I'm sorry for my clunky answers. I don't know what it is about investing, but after reading and reading and reading about it, my mind just can't take it in. I think that it's the acronyms that make my brain hurt.

MDM

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Re: Figuring out where to start
« Reply #4 on: June 15, 2015, 02:06:27 PM »
Agree with previous posts.

Adding on: have you investigated individual 401k options?  Particularly in the good music-gig years it might be nice to defer more than the SEP-IRA allows (unless you already do the max).  See http://www.getrichslowly.org/blog/2013/06/06/sep-ira-vs-self-employed-401k/.