The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: Madman on March 11, 2015, 02:28:00 AM

Title: What to do with my money?
Post by: Madman on March 11, 2015, 02:28:00 AM

Hello Mustachians. I have always been an okay saver, of course not as extreme as you guys, but I have a bit saved and I am looking for advice on what I should do at this point. I really hate my job nowadays and although it pays well I have been dreaming of retiring early. I am 35 living in the US.
My accounts are as follows:
23k    Cash
266k  401k
92k    Taxable stock account (generates 1k in dividends per month, risky high div stocks)
10k    Newly opened Vanguard taxable account in VTIAX

I have been thinking of moving all the money in my dividend account over to Vanguard and going full index.
I have also thought maybe it would be better to keep the div stocks and use the div money to buy the indexes.

Any advice is greatly appreciated!

Title: Re: What to do with my money?
Post by: innerscorecard on March 11, 2015, 03:48:36 AM

What do you mean by risky dividend stocks?

Why did you pick individual stocks? What's the extent of your financial analysis? Why do you want to index?

Title: Re: What to do with my money?
Post by: Madman on March 11, 2015, 04:13:34 AM

My dividend portfolio is made up of mostly BDCs which are taking a beating lately. PSEC, MCC, PFLT, FULL. I also own non BDC stocks, EGAS, F, INTC.

I am trying to be a Mustachian by moving to index funds. My high div portolio is not optimal since I am paying taxes on those dividends and I am still in the accumulation stage. Also there is constant news about these stocks about wether they can continue to afford their dividends. PSEC had a share price drop AND have slashed their dividend. So I want to get away from these types of stocks. I had started buying blue chips just before I discovered MMM.

So my question is in my situation would a Mustachian keep those Div stocks or move the money into index at Vanguard.

Title: Re: What to do with my money?
Post by: innerscorecard on March 11, 2015, 06:32:27 AM

If you believe in the efficient market hypothesis and don't want to spent a lot of time researching and picking securities, you should go ahead and immediately index. The important thing is that you need to stick with that as well. What a lot of people do is move from strategy to strategy and be the proverbial hot dumb money. You need to avoid that.