Author Topic: Saving - first time ever...advice please  (Read 2689 times)

Pasquatch

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Saving - first time ever...advice please
« on: April 24, 2015, 07:27:11 PM »
After years of throwing money away and getting in obscene debt I am finally in a situation where I can save and invest.

I will keep it simple...this is what I'd like to do.  I'll take percentages of where my money should go as opposed to dollar amounts (if I am way off base tell me):

- I am leaving my current low 6 figure job for another low 6 figure job.  I was given a severance package.  I will have a lump sum - about 9 months pay. I have a 401K with my current job.  I will also have one with my new job.  (the new one does not match much at all - 1 or 2%).  Should I roll over the existing 401K into the new 401K?  Should I open a retirement type IRA and roll it in there?  A little of both?

- I would also like to open a retirement/ IRA regardless of the above and have it come straight out of my check (if not my check, then my bank account after taxes).

- I'd like to also open some sort of savings account for some emergency cash. (I have about 3 months of emergency cash right now).  I was thinking Everbank for this.

- I also exchange a small % of my after tax cash for precious metals and hold the physical metal.  This I do pretty much manually, weekly or monthly depending on what I am exchanging my fiat currency for.

- Finally, I would like to have some of my money work harder for quicker returns (months to a few years).  Stocks, funds? etc...

I am 42.  My assets are not much.  401K and a house that should be paid off in about 12 years.

Even if you simplify the % of where my money should go would help me.  I don't care if it has to be $5 a week or $1 a week to put away, I just need some idea on how to break this up before I blow it on crap.

Any financial firms or funds, or whatever would also be appreciated.   I'd prefer to hear from folks here rather than walk into a bank or investment firm and get hosed.

Thanks!

MDM

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Re: Saving - first time ever...advice please
« Reply #1 on: April 24, 2015, 07:46:21 PM »
- I am leaving my current low 6 figure job for another low 6 figure job.  I was given a severance package.  I will have a lump sum - about 9 months pay. I have a 401K with my current job.  I will also have one with my new job.  (the new one does not match much at all - 1 or 2%).  Should I roll over the existing 401K into the new 401K?  Should I open a retirement type IRA and roll it in there?  A little of both?
Which has the best funds & fees for your desired asset allocation?

Quote
- I would also like to open a retirement/ IRA regardless of the above and have it come straight out of my check (if not my check, then my bank account after taxes).
You can set up automatic investments at any of the usual suspects (Vanguard, Fidelity, Schwab, ...)

Quote
- I'd like to also open some sort of savings account for some emergency cash. (I have about 3 months of emergency cash right now).  I was thinking Everbank for this.
Appears GE Capital (among others) pays higher interest for savings.

Quote
- I also exchange a small % of my after tax cash for precious metals and hold the physical metal.  This I do pretty much manually, weekly or monthly depending on what I am exchanging my fiat currency for.
Why?

Quote
- Finally, I would like to have some of my money work harder for quicker returns (months to a few years).  Stocks, funds? etc...

I am 42.  My assets are not much.  401K and a house that should be paid off in about 12 years.

Even if you simplify the % of where my money should go would help me.  I don't care if it has to be $5 a week or $1 a week to put away, I just need some idea on how to break this up before I blow it on crap.
Put the annual maximum you can (e.g., $18K to 401k, $5500 to tIRA, $3350 to HSA) to tax deferred accounts, then into taxable investments with any left over after expenses.

You could do worse than starting with https://investor.vanguard.com/other-savings-goals/get-started

KungfuRabbit

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Re: Saving - first time ever...advice please
« Reply #2 on: April 24, 2015, 08:22:46 PM »
....why buy gold?  So many downsides

If you are worried about an economic meltdown and currency crash buy property and guns.

h2ogal

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Re: Saving - first time ever...advice please
« Reply #3 on: April 24, 2015, 08:32:47 PM »
When I first started saving I lacked discipline.    But I found that discipline can be built like muscles - by exercising it.   My advice is that when you start your New job, use payroll deductions to pay your savings first before you paycheck even hits your checking acct.  First max 401k.   Then do other ira if your agi is low enough.    Next do taxable accounts.   I use treasury direct and buy some I bonds every payday.  Take home a little less than you really think you need.  You will figure out how to live on less.

I aim for 60% us stocks (total mkt index or sP 500)
10 % total into stock index
30% bonds

Plus in addition cash for emergencies.
« Last Edit: April 24, 2015, 08:38:08 PM by h2ogal »

Indexer

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Re: Saving - first time ever...advice please
« Reply #4 on: April 24, 2015, 10:44:13 PM »
- I am leaving my current low 6 figure job for another low 6 figure job.  I was given a severance package.  I will have a lump sum - about 9 months pay. I have a 401K with my current job.  I will also have one with my new job.  (the new one does not match much at all - 1 or 2%).  Should I roll over the existing 401K into the new 401K?  Should I open a retirement type IRA and roll it in there?  A little of both?
Which has the best funds & fees for your desired asset allocation?

Quote
- I would also like to open a retirement/ IRA regardless of the above and have it come straight out of my check (if not my check, then my bank account after taxes).
You can set up automatic investments at any of the usual suspects (Vanguard, Fidelity, Schwab, ...)

Quote
- I'd like to also open some sort of savings account for some emergency cash. (I have about 3 months of emergency cash right now).  I was thinking Everbank for this.
Appears GE Capital (among others) pays higher interest for savings.

Quote
- I also exchange a small % of my after tax cash for precious metals and hold the physical metal.  This I do pretty much manually, weekly or monthly depending on what I am exchanging my fiat currency for.
Why?

Quote
- Finally, I would like to have some of my money work harder for quicker returns (months to a few years).  Stocks, funds? etc...

I am 42.  My assets are not much.  401K and a house that should be paid off in about 12 years.

Even if you simplify the % of where my money should go would help me.  I don't care if it has to be $5 a week or $1 a week to put away, I just need some idea on how to break this up before I blow it on crap.
Put the annual maximum you can (e.g., $18K to 401k, $5500 to tIRA, $3350 to HSA) to tax deferred accounts, then into taxable investments with any left over after expenses.

You could do worse than starting with https://investor.vanguard.com/other-savings-goals/get-started

+1

I agree on all points.  I could reply to this topic, but I would just end up writing the exact same thing MDM did.

And to repeat.... why commodities?   Why would you want to invest in something with historical returns that are about the same as inflation only with a whole lot more volatility.  Its basically cash returns with stock level volatility.  It makes no sense.
« Last Edit: April 24, 2015, 10:46:51 PM by Indexer »

Pasquatch

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Re: Saving - first time ever...advice please
« Reply #5 on: April 25, 2015, 01:47:23 PM »
Thanks for the info.  Plenty already.  Before my post I didn't even know an hsa existed.  Gonna do my due diligence with that now also.

nereo

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Re: Saving - first time ever...advice please
« Reply #6 on: April 25, 2015, 01:59:07 PM »
I agree completely with MDM.  I'll add only this:
I question why you want to save based on percentages and not absolute dollar amounts.  I think both can be useful, but...
1) always contribute enough to your 401(k) to get the company match.  Always.
2) always contribute the maximum to your IRA - that's $5,500 right now if you are under 55.  Always.

Putting it on autopilot (i.e. having it deducted automatically from your paycheck) is a great way of doing this. 
IMO #1 and #2 should be absolute requirements for 99% of all full-time US workers who are above minimum wage.