Hello,
I decided to post as much info as I could about my finances and not worry about what other’s think. I don’t understand investing yet, since I’m not around a lot of people that talk about money. But I want to learn and I’m hoping someone might lend some advice where to start. I got behind in life financially as well as developing skills, but I've been doing my best the last several years getting out of debt, saving and learning a trade. I’ve completed an education and am working in a trade that within 4 years I’ll have an annual income of roughly 70,000. If I retire at 55 I’ll have a nice pension; however I want to retire before then. I’m 33 years old. I don’t know anything about my 401K, and I’ve never put anything into it (I’m working on that now). Also, I’m curious about vanguard’s individual account. Vanguard states that the money you make will be taxed quite a bit
https://investor.vanguard.com/investing/joint-account-individual-account . But if I want to retire early, wouldn’t this be the kind of account to open as well?
Also, I’m a little nervous about investing in the stock market. By word of mouth it sounds like it’s doing really good which concerns me. I’ve heard that construction will peak in two years and so I’m thinking on allocating as much money as I can into an index fund. I think that construction gives a good indication on the economy. However, in 1.5 years I’m thinking on gradually putting more money towards bonds until the market peaks and goes down once again and prices are low. Then sell my bonds and invest in more index funds once again.
I can see implementing the game plan I mentioned above in the Vanguard Roth IRA account, but what about the individual account through vanguard. From what I’ve read it sounds like Index funds are only for that kind of account because they are more tax efficient. So my game plan above would not work in an individual account
https://investor.vanguard.com/investing/joint-account-individual-account. I know nobody can predict the market, but what's up must come down and it seems wise to invest in index funds when the market is low.
What do I do?
• Annual income as of now: 28,800
• Annual income in 4 years: 70,000 +
• Monthly expenses: 1,200
• Monthly income: 2,400
• E-fund: 10,000
• Vanguard Roth IRA: 1,555.03 (100% of funds placed in VTTHX)
• 401K: 116.56 (Just started)
• Pension: 1.13 (Just started)
• Vacation: 553.03
• No debt
Monthly Expenses:
• Rent: 400
• Gas: 140
• Food: 200
• Insurance: 59
• Other: 160
• Tithe: 200
• Phone: 27
Total = approximately 1,200
Thanks everyone!