Author Topic: Investment advice for someone with no 401k and limited cash  (Read 1803 times)

boognish

  • Stubble
  • **
  • Posts: 130
Hi everyone,

My employer does not offer a 401k and I've made the maximum IRA contribution the last two years.

I have about $15k in cash I'd be comfortable investing but am unsure where to put it. I'm 25 and only recently started making a semi-adult salary (50k).

Most of the Vanguard funds I see recommended by Mustachians and Boggleheads appear to have at least a $3,000 minimum investment, which makes building a diverse portfolio a little bit harder.

I've been cranking out applications trying to land a job with a 401k but haven't had much luck.

What would you recommend a Mustachian do with $10 or $15k? This seems like it would be a common question for new Mustachians, my apologies if it's already been addressed.

Thanks in advance for any responses!



AssetGrinder

  • Stubble
  • **
  • Posts: 114
  • Location: Victoria BC Canada
    • Asset-Grinder Finance Blog
Re: Investment advice for someone with no 401k and limited cash
« Reply #1 on: June 20, 2014, 10:46:32 AM »
You can be well diversified with 15k with 2-3 funds. Being you are quite young and your salary would grow you could skip bonds for now. But as soon as you have more invested and have over 50k then look to implement bond funds. Go for a core American, Europe or all world fund and small exposure to emerging markets. That will cover you for diversity. You can stick with that approach for quite awhile. Once you have over 50-100k you can start implementing more nich select funds to suit your goals. Best of luck!

matchewed

  • Magnum Stache
  • ******
  • Posts: 4336
  • Location: CT
Re: Investment advice for someone with no 401k and limited cash
« Reply #2 on: June 20, 2014, 11:11:44 AM »
I'd focus on one or two already diversified funds, Total US Market and the like. Then do your research, further diversification can come later as you educate yourself and build your portfolio.

rmendpara

  • Pencil Stache
  • ****
  • Posts: 602
Re: Investment advice for someone with no 401k and limited cash
« Reply #3 on: June 20, 2014, 11:36:19 AM »
Start with broad market funds, and you can diversify over time into the specific sectors/styles/products that you want in your target allocation.

You don't need to be diversified right away. Chances are, you'll have many hundreds of thousands in these funds by retirement, so what's infinitely more important than how you invest today is how much you invest today.

boognish

  • Stubble
  • **
  • Posts: 130
Re: Investment advice for someone with no 401k and limited cash
« Reply #4 on: June 20, 2014, 02:43:31 PM »
Thanks for the responses!