Hello, wise mustachians!
I recently finished graduate school (yay!) started a job (double yay!). On Jan. 1st I will be eligible to start investing in my company's 401K (with a 4% company match) which will not-so-coincidentally be exactly the same time I am done paying off my student loans and making a downpayment on a house. So, the first of the year is my starting date to start saving like crazy for early retirement!
My goal is to save at least $40,000 a year, which will be used first to both max out my 401K and Roth IRA. I had started my Roth in graduate school, which I have been keeping in roughly 1/3 each large cap, small cap, and international index funds/ETFs.
When I was looking over my 401K the options weren't great. The lowest expense ratio is an S&P index at 0.2; the others get up to the 0.8-1 range (this excludes some completely ridiculous >1 or 12b1 charging funds). At this early stage in my investing, does it matter much whether I lump it all into the lowest expense ratio versus sorting it into large cap/small cap/international bins? If it does, which is preferable?
Secondly, I am completely unfamiliar with taxable investments (not having had any money up until now!). I will have at least $17,000 a year to put somewhere that won't be protected by either the Roth or the 401K. Does anyone have any suggestions on what to do with this? I was considering Vanguard admiral shares or LendingClub... not sure what other options are out there, aside from real estate, and I already am getting ready to own a home that may double as a rental property in the future if I move for work (it passes the 50% rule. Yay!)
I would really appreciate any advice from you wiser and bushier heads as I get started!
Thanks!
Tracy