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Learning, Sharing, and Teaching => Investor Alley => Topic started by: abongiov on October 15, 2013, 05:07:47 AM

Title: How to invest 70K
Post by: abongiov on October 15, 2013, 05:07:47 AM
Hellow fellow Mustachians,

My wife and I moved in the US about 3y ago. We could not invest before being here for 3 years, that's legal definition of permanent resident. My wife has an expat contract with pension plan in Belgium. I work on a US contract and contribute 12% to my 401k with company 9% match. We have a house in Belgium rented 1950 euro with 1350 euro loan payment. We bought a house here 2y ago with a 15 years loan at 3.25%.
We have today 110k in savings, I want to keep 40k in savings just in case.
Now how to invest the 70k ?
I plan to open an IRA for my wife and maxing out tax deduction.
We have two kids and no 529 because so far we have Belgian account for them with about 14k on each account. But I guess we could open 529 for tax purpose.

I was thinking of opening an account on sharebuilders and start investing but I don't want to spend more than 2h/week on this. So I read about Betterment, Lending Club and Motif.
I read a few things on this blog and everybody seems to advice Vanguard alot. Should I just open a Vanguard account and put the money in what of their ETF ? And just let it work ?
In addition to my 401k contribution and the initial 70k, we can invest 3k/month. How to minimize fee with monthly additions...

Sorry for the long post but I believe all info is important to receive good advise.

Thank you for your thoughts.
Title: Re: How to invest 70K
Post by: elai on October 15, 2013, 06:19:07 PM
I dont know who told you couldn't open a US brokerage account and start buying investments until 3 years, but they were incorrect.  Non-citizens who don't even live in the USA can do so.
Title: Re: How to invest 70K
Post by: Abe on October 15, 2013, 06:27:49 PM
I recommend investing directly with Vanguard.  With your amount available for investment, get admiral shares (they have lower fees than regular shares) in index funds of your choice (usually need minimum $10,000 per fund). VTSAX is invested in a wide range of companies to represent most of the stock market. There are other ones geared to smaller companies, bonds, etc. You can probably get advice from them if you call and mention the amount you wish to invest.  Vanguard doesn't charge a fee for adding more money to one of their funds. 
Title: Re: How to invest 70K
Post by: abongiov on October 15, 2013, 08:49:19 PM
Well, Bank of America although they were the only one to open a checking account before I got a us ssn indicated that I needed to be permanent resident to have an investment account.
Other website I tried a year ago also had this mention in tiny letters. Not looking thoroughly I could have open an account not knowing this detail. The gov website definition is pretty clear: three years of residency to be permanent resident.
I am not sure it is illegal to open an account without being permanent resident or just that some brokers are afraid to deal with foreign who could leave at anytime and want some kind of guarantee. Getting utilities and credit card (200k yearly revenue but no credit history in the credit card !) when we got here, with high paid jobs and cash was a nightmare already. So I would not be surprise if it was the later.

Thanks for the advise, I'll contact Vanguard.