Author Topic: Why Don't You Explain This To Me Like I'm 5  (Read 2659 times)

blackcat

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Why Don't You Explain This To Me Like I'm 5
« on: February 16, 2019, 06:23:14 PM »
why-dont-you-explain-this-to-me-like-im-five-28136460 by xberingeix xberingeix, on Flickr

Hello - A little background.

I'm an absolute moron. Sure I have graduate degrees but am legit. dumb. I'm 36 and for the first time in my life, I have no consumer debt. I found out about this blog from a coworker and I feel like my eyes have been opened.

Me: $1800 in retirement, $280 in ROTH IRA (VTI), $100 in Vanguard brokerage (hoping to have a money market but don't have $3k for VASIX) $48k/year.

Wife: $18k in retirement, $3200 consumer debt (1 year left in management/consolidation program), $55k in student loans. $90k/year

I'm trying to convince her to spend less and spend more time in nature/cooking at home.

I want to know where I should be putting my money? Do I max out my Roth IRA (VTI) $6k in 2019? Do I have VTI in an individual account as well, in case I need to borrow quickly for car repairs or w.h.y.? Does it make sense to have three accounts at Vanguard 1) Roth IRA - VTI, 2) VTI in an individual account, and 3) Money Market emergency fund?

My coworker has VFIAX VTSAX VASIX. Apparently you can buy VFIAX as an ETF per share, but as I mentioned, total moron, and can't figure out how to do that on Vanguard.

The goal is to use the philosophy over the next 14 years and retire at 50 or 19 years and retire at 55. My goal is $800k between us.

Other than continuing to research on the forum, what should I do? Any help is appreciated. And I know I'm new (and a moron), so if you must post a snarky meme or comment, feel free. As cool as this stuff is, the internet is still the internet and humans are still humans.

Thanks for any help - I need it!

bc

MDM

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #1 on: February 16, 2019, 07:59:57 PM »
blackcat, welcome to the forum.

You could start with Investment Order and go from there.

ILikeDividends

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #2 on: February 16, 2019, 09:03:48 PM »
blackcat, welcome to the forum.

You could start with Investment Order and go from there.

After that, read the JL Collins stock series:

https://jlcollinsnh.com/stock-series/

To the OP: A moron can't be fixed.  I suspect all that you need is a little information, so I doubt you'll ever qualify for that title.
« Last Edit: February 16, 2019, 09:21:28 PM by ILikeDividends »

JAYSLOL

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #3 on: February 16, 2019, 09:04:14 PM »
Welcome!!  I'll let the US-based folks here help with the specific investment advice as far as accounts go etc, but just want to say welcome and congrats on wiping away your consumer debt!  I remember finding MMM around December 2014 and reading through all the blog posts and a lot of the forum discussions in less than a month.  It then took around a year for everything to really take hold, and for me to start saving and investing like a mustachian.  It didn't take too much work for me to get my wife (mostly) on board, but I know it can be very difficult for some.  Please remember to give her the support, encouragement and patience it takes to make the sometimes radical life-shift becoming frugal can be. 

kei te pai

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #4 on: February 16, 2019, 09:18:40 PM »
Hi, welcome. Generally this forum is a kind and good humoured place, dont worry about asking genuine questions here. You wont be mocked for the question. You might be for crazy spending though!
Take your time to look around, there is a lot more going on than just how and where to invest.

RWD

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #5 on: February 16, 2019, 09:41:24 PM »
My coworker has VFIAX VTSAX VASIX. Apparently you can buy VFIAX as an ETF per share, but as I mentioned, total moron, and can't figure out how to do that on Vanguard.
If you go to the Vanguard page for a mutual fund there is a link to the equivalent ETF. In the case of VFIAX the ETF is VOO. I personally prefer mutual funds over ETFs because you can buy partial shares but ETFs are usually a good choice as well. VFIAX has the same expense ratio as VOO so it's really a matter of preference/availability.
https://investor.vanguard.com/etf/profile/voo

MrThatsDifferent

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #6 on: February 16, 2019, 11:17:37 PM »
Your homework is to read MMMís most popular blog posts and then as many of the rest. Then read JL Collins, and the Go Curry Cracker. Then post a case study.

expatartist

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #7 on: February 17, 2019, 12:58:02 AM »
Start with this https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/ rather than "getting her to cook at home" etc. Lead by example.

MustacheAndaHalf

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #8 on: February 17, 2019, 02:19:22 AM »
My coworker has VFIAX VTSAX VASIX. Apparently you can buy VFIAX as an ETF per share, but as I mentioned, total moron, and can't figure out how to do that on Vanguard.
You said your co-worker has this:
Vanguard 500 Index Fund Admiral Shares (VFIAX)

Is it possible he actually has this?
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)

If not, I'd recommend that instead.  If you already own U.S., you can diversify to international.  If you own two U.S. funds, there's a lot of overlap.  Speaking of overlap, the other fund holds 20% stocks:
LifeStrategy Income Fund (VASIX)

Because you have to worry about fund minimums, I'd actually recommend you invest 100% in "VT", Vanguard Total World.  It holds thousands of U.S. stocks and thousands of stocks from around the world.  It's as diverse as you can get with 100% stocks:
https://investor.vanguard.com/etf/profile/VT

Once you have enough money to invest, you could start buying VTI (U.S.) and VXUS (international) separately, and maybe add BND (total bond market) as well.

blackcat

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #9 on: February 17, 2019, 03:41:45 AM »
Thank you all for the replies. I'm going through the suggested pages/steps now. I appreciate the advice!

JAYSLOL

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #10 on: February 17, 2019, 06:36:53 AM »
Thank you all for the replies. I'm going through the suggested pages/steps now. I appreciate the advice!

No problem, we're here if you have any questions


Dee18

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #11 on: February 17, 2019, 01:25:34 PM »

One of my favorite MMM posts is here:
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
The chart shows you how many years until retirement, based on your savings rate.

Heckler

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #12 on: February 17, 2019, 01:53:32 PM »
here's another great resource with videos in case the 5 year old has troubles reading. ;)

https://www.bogleheads.org/wiki/Getting_started


Finances_With_Purpose

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Re: Why Don't You Explain This To Me Like I'm 5
« Reply #13 on: February 18, 2019, 10:45:16 AM »
Welcome!  You can always do a case study here in the case studies subforum.  You add more details, you'll get more input. 

For now, I'd pay off consumer debt FIRST.  Then, cut up the CCs and avoid any further consumer debt.  Next, I would put together a decent-sized emergency fund in case either of you take a job loss.  (Dave Ramsey is great on these types of things steps, though I like MMM/others recommended above more re: investments.)

Then, I'd focus in on investments - either before or after the student loans. 

You didn't say what the rates are on those student loans, but that's another priority since those never go away and will free up more cash flow.  If your rates are super-low, invest more and pay them slowly, but realize you'll be carrying more debt (and thus risk) along the way.