Author Topic: Investing with Vanguard short term and long term.  (Read 1610 times)

Auggie

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Investing with Vanguard short term and long term.
« on: January 28, 2018, 11:25:47 AM »
Hello to all,

I have recently opened a Vanguard regular investing brokerage account and an IRA with Vanguard. My initial plan was to invest a set amount of money each month into both accounts but I am left wondering if this is tax efficient and if it is going to accomplish my goals.

My goal is to build some short term wealth that I can use relatively soon I guess you can call it a sort of cashflow and the other part of the goal is to build long term wealth.

As of now I have 6,000 in my brokerage account in US stocks which are mostly tech stocks and the S&P 500 ETF
My IRA has $500 invested in the S&P500 ETF

I did not really intend to have such an unbalanced portfolio right off the bat but now that I have read about Ray Dalio's all weather portfolio. I think that would be a great way to invest safely.

How can I invest aggressively to build some short term wealth to be able to use in the near future as well as build longterm wealth meanwhile keep saving capital to invest in real estate?

Just realized by writing this that I seriously need some guidance in finding which direction to go in.

I am 27 years old.

last year I earned $85k before taxes

I have $80K in a regular checkings account

$6,500 in my Vanguard account.

Wanting to use most of my cash reserves in real estate.

harvestbook

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Re: Investing with Vanguard short term and long term.
« Reply #1 on: January 28, 2018, 07:06:37 PM »
I'd focus on maxing out my traditional IRA for the tax cut. The brokerage account is risky if you have a short-term goal. If I was dead set on real estate, I'd either leave the rest in a regular savings account, 1- or 2-year CDs, or short-term bond fund. Unless the checking account is earning interest, I'd move it to savings or money market and pull in whatever interest rate you can.

Depends on how much money you want to build before you start in real estate, but it would be a bummer for the stock market to crash right when you wanted to make the move (although maybe real estate would be on sale then.)

Auggie

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Re: Investing with Vanguard short term and long term.
« Reply #2 on: January 29, 2018, 06:59:58 PM »
Thank you. I will focus on maxing out my IRA first.

facepalm

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Re: Investing with Vanguard short term and long term.
« Reply #3 on: January 29, 2018, 07:43:41 PM »
Define what you mean by short term.

I'd say to build short term wealth focus on cutting expenses and saving as much as you can. Put that toward the real estate.

I would then max out your tax advantaged account first.

Have you chosen an asset allocation yet?

Auggie

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Re: Investing with Vanguard short term and long term.
« Reply #4 on: January 29, 2018, 08:25:20 PM »
I tracked my spending for 2017 and I know exactly where I can save more although most of my earned income is saved.

I have not established an asset allocation yet. I am new to investing in general. My mindset change was late 2017 and ever since then I have been self educating about real estate investing and just recently started to dip into investing in the market since real estate is very hot, especially in Los Angeles/Orange County California.

I would like to make my first real estate investment a house hack to minimize housing expenses.


sokoloff

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Re: Investing with Vanguard short term and long term.
« Reply #5 on: January 29, 2018, 10:26:05 PM »
I'd keep putting the money in the market and keep educating yourself about both the passive investing market (stocks, bonds, and mutual funds of same) as well as the real estate market.

You say you changed mindset in late 2017. That's great, but go slow, especially in real estate in a hot market. Read, study, ask questions, and learn. There's more risk to rushing into something than there is to keep your money parked in stocks while you learn. I am in tech and do hold some individual tech stocks, but for someone just starting and with around $10K invested, keep it simple and put it in a broad based (S&P 500 or broader) stock index fund. No need to sell the tech stocks you do have now [though you could], but direct future inflows to the broad funds.

Auggie

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Re: Investing with Vanguard short term and long term.
« Reply #6 on: January 30, 2018, 09:37:34 AM »
Thank you for your advice. I did get a bit overzealous with individual stocks. So starting this month I will begin a monthly deposit into my IRA investing in a broad index fund until I max out this year.