Author Topic: Seeking some Financial Advice  (Read 2925 times)

KB92

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Seeking some Financial Advice
« on: September 01, 2015, 07:50:32 PM »
Hi everyone,

   I'm currently looking for some advice on where to go from where I currently stand financially. I want to invest in the VTSMX fund but am unsure if I should exchange funds I currently hold in my ROTH for it or open another account at Vanguard? Or if there are any other ideas on what I should do financially I would greatly appreciate it! Below are some details about me to help with my question, however I currently about $4500 of cash I would like to invest. Thank you for the help!

Info:
23 years old (Student)

Income (monthly):
VA GiBill - $2900
VA Disability - $1334
Total: $4,234

Accounts:

Vanguard Roth IRA
 - VTIVX $1697.89
 - VGSTX $1747.63
   Total $3445.52

Lending Club
 - $2500

(4) CD's
   Total $ $5082.29

Metals
 - About $3000 in 1oz silver American Eagles

Emergency Savings Account:
 - $3000

Checking (Currently):
 - $5000

Debt:
 - $0.00 I use a capitol one credit card for all purchases and pay it off at the end of the month

Expenses (monthly):
 - $2200 rent, cellphone, insurance, food etc.

« Last Edit: September 01, 2015, 07:52:22 PM by KB92 »

harshalpatel

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Re: Seeking some Financial Advice
« Reply #1 on: September 01, 2015, 09:56:43 PM »
Out of curiosity, why do you own metal?

Are you trying to hedge against future inflation?

BTW, great job on your financial position esp for a 23 year old. You're in a much better place than the majority of your peers.

MDM

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Re: Seeking some Financial Advice
« Reply #2 on: September 01, 2015, 10:17:03 PM »
KB92, welcome to the forum and thank you for your service.

If you had left your question open ended, I might have suggested putting everything into VTTSX.  It is similar to VTIVX, just with the "2060" label - currently both are 90% stocks and 10% bonds.  VTIVX will start increasing its bond allocation 15 years earlier than VTTSX, so it depends on your risk tolerance.

As you have a specific question about VTSMX, I'll ask "why VTSMX, and does that fit with your Investment Policy Statement?"  Nothing against VTSMX - if you want to go 100% stocks it is a defensible choice - just asking to ensure you have thought about it.

Good luck!

ETA: See also http://forum.mrmoneymustache.com/investor-alley/buying-vtsmx-for-the-first-time-should-i-sell-target-fund-2045-to-get-more/ for a very similar question.
« Last Edit: September 04, 2015, 04:06:26 PM by MDM »

Financial.Velociraptor

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Re: Seeking some Financial Advice
« Reply #3 on: September 02, 2015, 06:23:16 PM »
You have a high allocation to cash and near cash but that is probably warranted until you complete school and have gainful employment.  You've gotten good advice here on which Vanguard fund to use.

I used to use the capital one card (1.5% back) and pay it off each month like you.  I have recently moved to Citi Double Rewards Mastercard.  Same zero fee set up but 2.0% cash back.   Recommended!

KB92

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Re: Seeking some Financial Advice
« Reply #4 on: September 03, 2015, 04:35:21 PM »
Thank you for the responses!

harshalpatel: I've only recently begun to read up on investment strategies. When I was in the military I was looking for ways to in a sense block myself from using my money so I would just dump it in CD/silver so I couldn't spent it. As of now I figure I will just hold on to it as I already have it with me and locked up.

MDM: I initially looked at VTSMX as I've noticed many in this community have only good things to say about it and read MMM initial page about the index fund. I'm honestly new to investing and since I had a lot of cash initially sitting in a savings account I've only recently begun making it work for me. Do you recommend I exchange from my new current accounts (VGSTX/VTIVX) to VTTSX? In all honestly I am looking to go and get the best bang for my buck and wouldn't mind taking risky investments as I am young and have time in my favor, I'm just unsure on how to do so. Thank you for the links as well. Very helpful.

I will definitely look into the Citi cc. Thanks you!

MDM

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Re: Seeking some Financial Advice
« Reply #5 on: September 03, 2015, 04:56:02 PM »
I initially looked at VTSMX as I've noticed many in this community have only good things to say about it and read MMM initial page about the index fund. I'm honestly new to investing and since I had a lot of cash initially sitting in a savings account I've only recently begun making it work for me. Do you recommend I exchange from my new current accounts (VGSTX/VTIVX) to VTTSX?

Any or all of the four funds mentioned could be good for you.  In your situation I'd tend not to go with VGSTX due to the 40% bonds and cash it holds.  The thing to do truly is to write your IPS and stick to it.  You don't have to "get it right" as much as "stick with it." 

It can be daunting to write that IPS because you are new to this and it is difficult to know the right thing to do.  Again, however, the real value lies not in picking the right horse at the beginning of the race, but resisting the urge to change horses in the middle.  You may not pick the winner, but by trying to jump from one to another you run a real risk of ending in the dirt.

You might write an IPS and post it here for comments.

StockBeard

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Re: Seeking some Financial Advice
« Reply #6 on: September 04, 2015, 03:25:02 PM »
In all honestly I am looking to go and get the best bang for my buck and wouldn't mind taking risky investments as I am young and have time in my favor, I'm just unsure on how to do so. Thank you for the links as well. Very helpful.
Just sounds like you want to minimize your exposure to bonds for the time being. Just allocate a significant amount in stocks.
If you haven't seen bogleheads, check it out now: http://www.bogleheads.org/wiki/Three-fund_portfolio#Establishing_a_three-fund_portfolio