I recently rolled over an old 401k that I let sit idle for six years and moved to Vanguard. The fund has about 42k in it now. I have it in an IRA, but am yet to allocate Funds. I've been reading Millionaire Teacher and he talks about picking an American Index, Foreign Index and a Bond Index. I'm a teacher and will have a pension when I retire, so I think I will forgo the bonds because I have stability in my pension(does that make sense?).
About me:
I’m 33, wife is 30, We have two kids (2 and 5) we are both teachers in a middle school, been teaching for 6 years. We both will have a pension on top of our investments, the size of it obviously depends on how long we teach. I think realistically I would like to retire early by age 50 or so.
We have a house that we have over 100k in equity in. We are looking to sell possibly this summer to capture some of that and pay off our 50k in student loan debt and move closer to work(we are 35 minutes away).
I think that because I have a teacher retirement pension, I have a high risk tolerance for my investments. I teach in MA so we won’t be disbanding teacher unions like WI anytime soon. I was thinking I should have a mix of international, domestic and bond indexes, but I’m wondering if I could just do stocks? I hate how naive that sounds, so I guess thats part of my question for you all. Does that make sense?
Other assets: We have two great cars that are paid off. Honda van and a Toyota Corolla. We drive the van everywhere and might sell the corolla for cash since we rarely use it, since we commute together.
So with that information I’m asking if it makes sense to allocate:
Option 1:
20k in VTSAX
10k in VTIAX (international)
10k in VBTLX (Bonds)
OR Option 2:
25k in VTSAX
15k in VTIAX (international)
OR
If you have suggestions I would love to hear them. As a teacher, I love learning and this is an exciting new venture. Thanks for taking the time to provide feedback.