Author Topic: Need to consolidate investments; advice?  (Read 3177 times)

capital

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Need to consolidate investments; advice?
« on: November 16, 2012, 02:23:31 PM »
I've been working for a couple years, and especially since paying off my student loans, I've started piling up money in Roth IRAs & 401ks in Vanguard funds. In addition, after maxing out the 401(k)s and the Roth IRA, I've piled up a bunch of money in ING Direct savings, beyond my 9-month-ish emergency fund in a 5-year CD.

My goals aren't too specific yet but are in the direction of eventually becoming financially independent, maybe retiring early, probably spending a while traveling while I'm still young, and maybe buying property in a few years, so I'm wondering where I should keep some of the money currently in savings where it'd be reasonably flexible-- a taxable investment account is what I'm thinking.

The money is kinda spread out between companies, and I'm not entirely sure which is best, though since the money is already in Vanguard funds it seems like a decent idea to move it to Vanguard, from what I've read here. I'm also thinking about moving from VFIFX (an auto-rebalancing blend of stocks and bonds, in the Investor Shares version) to a similar blend of funds in the Admiral Shares version, since I have a good chunk of savings. I've also heard that ETFs can be good for DCA'ing money toward as it builds up, but am still learning about those.

Here's the situation:
-$9.8k, VFIFX, Roth IRA on ETrade
-$11.8k, VIIIX, Fidelity (previous employer's 401(k))
-$14.1k, VFIFX, MassMutual (previous employer's 401(k))
-$15k, ING Direct checkings/savings
-$10k, Ally 5-year CD (emergency fund)

I'm thinking I should move it all to Vanguard, rolling the 401(k)s to an IRA and keeping the Roths Roth, basically to have a diversified tax exposure since I don't have any plans and I have no idea what tax rates will be in 2040. I'd probably try to distribute it similarly to VFIFX, but Admiralized, so:
-10% Vanguard Total Bond Market Index Fund Investor Shares, moving to Admiral Shares as I hit the minimum for that
-27% Vanguard Total International Stock Index Fund Admiral Shares
-63% Vanguard Total Stock Market Index Fund Admiral Shares
Any comments on that?

There are also ETF versions of the funds, which appear to have lower fees, but Googling around, it seems like they're the wrong choice due to specificities around trading the funds, at least for inexperienced folks:
http://www.bogleheads.org/forum/viewtopic.php?t=30493
Is that accurate?

Also, I've just being putting money into the Roth at random points when I feel my savings account bulging-- should I DCA that, too? (But doesn't that run into a lot of purchase fees?) I usually have a bunch of extra money left over at the end of the month; should I be DCA'ing that into a taxable account? How do I avoid too many transaction fees? I've also had occasional windfalls, like various bonuses-- should I just ratchet up DCA'ing into the taxable account when that comes around?

Honest Abe

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Re: Need to consolidate investments; advice?
« Reply #1 on: November 17, 2012, 07:32:13 AM »
Also, I've just being putting money into the Roth at random points when I feel my savings account bulging-- should I DCA that, too? (But doesn't that run into a lot of purchase fees?) I usually have a bunch of extra money left over at the end of the month; should I be DCA'ing that into a taxable account? How do I avoid too many transaction fees? I've also had occasional windfalls, like various bonuses-- should I just ratchet up DCA'ing into the taxable account when that comes around?

Betterment.com is good for this

grantmeaname

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Re: Need to consolidate investments; advice?
« Reply #2 on: November 17, 2012, 07:34:04 AM »
DCA may protect you from volatility, but from what I've seen DCA that causes you to delay investment tends to lose you money compared to throwing it in in a lump sum, so I don't think so highly of it. There may be some value to it (any evidence of that?) but it's certainly not essential.

icefr

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Re: Need to consolidate investments; advice?
« Reply #3 on: November 18, 2012, 12:54:00 PM »
Do you want to buy a house/condo in the next few years? If so, I would keep piling up cash for that goal instead of investing outside of your tax-advantaged accounts, but keep maxing them out.

If you're just using Vanguard funds, I would consider moving everything to Vanguard. Vanguard doesn't charge any fees for buying amounts at random times, so long as it's at least $100 at a time. You can also set up automatic contributions and other useful things, all for free. I'm guessing that ETrade charges you money for buying Vanguard funds and that possibly your old 401(k) has fees for keeping it open, so I would definitely consider rolling your old 401(k) over to a Rollover IRA at Vanguard.