FOREX!
But seriously, Vanguard is my favorite company for low expense mutual funds and ETFs. If you set up an account directly with them you can add fund shares without any trading fees.
Schwab also has some good low-expense funds if you already have a brokerage account there.
Vanguard - total international index, both developed and emerging markets (VGTSX)
>> "Also available as a lower-cost Admiral Shares mutual fund and an ETF."
https://personal.vanguard.com/us/FundsSnapshot?FundId=0113&FundIntExt=INT
The Vanguard Target funds (Target 2040, 45, ...) are an interesting choice since it is a fund of index funds, that shifts over time to include more bond fund shares. If I were getting shares of it I'd pick a year after I plan to retire (for example 2050 instead of 2040), to be more aggressive about staying in stocks.
Thanks. This is exactly the type of thing I was hoping to learn by starting this thread. I'll dig in more this weekend.
I would look into doing this. You say you have between $100 and 200k to invest. I would maybe consider doing the following:
Max out a solo 401k and her 401k. Make up any salary deficit this causes out of the $100-200k. This reduces your tax liability for the years you are able to do this which can be significant if you are above or in the midst of any deduction cuts offs or phase outs.
Max out her Roth as well. Not only because any tax advantaged space >>>> taxable space but because Roth IRAs have a nice withdrawal option if you think there is a chance you would retire early
http://www.rothira.com/blog/what-is-rule-72t
I don't think your situation is anything fancy enough to pay an annual % to someone to manage. Take a look at the bogleheads link posted for some good ideas. You may also be able to find a fee-only adviser to help you come up with a plan. It could be just a one time fee for advice and help with setup and away you go
One of the biggest things you need to determine is how well you tolerate risk. And I don't mean 'I am taking risk because I think I should' but know your actual ability to watch money vanish from your accounts. If you can't stomach watching 50% of your balance vanish then you will want to have a less risky portfolio than 100% stocks.* Sure it might not return as much with a safer mix of bonds but it will return more than you panicking and selling at or near the bottom. Many people say they can tolerate risk but looking at how many fled the markets in 2008 and 09 show that a huge percentage were fooling themselves
*Opinions vary about the stock\bond mix by age so this was just an easy math example
I'm fine with risk in the context of investing the pool of 200k I initially mentioned. Like I said, it's not the nest egg and I think I'm still pretty young, so I'm willing to assume more risk in the pursuit of higher gains. Nothing crazy of course. See my response to Sho'Nuff for more information.
Would you mind ballparking what you have in non-retirement assets? Will help give a better picture of your financial situation.
I'm not sure what your retirement plans are, but if you only have $150k for retirement now and set aside the max contribution in a ROTH IRA each year (assuming 11k max (5500 for each of you) - you may not be happy with the results. If that is the case I would use at least some of that 100-200k you have laying around and beef up your retirement assets a bit with index/mutual funds that get a decent returns and let you capitalize on long term compounding. Slow, steady, and reasonably wealthy at retirement beats fast, risky, and potentially broke/hurting at retirement if you ask me.
I'm heavily invested in various american funds, and they have done well for me over the
years. You might want to check the following funds out.
American Funds Income Fund of America Cl AAMECX
American Funds Fundamental Investors AANCFX
American Funds Growth Fund of America Cl AAGTHX
American Funds EuroPacific Growth Cl AAEPGX
American Funds Capital World Growth & Income Cl ACWGIX
American Funds AMCAP Cl AAMCPX
American Funds International Growth & Income Cl AIGAAX
American Funds Bond Fund of America Cl AABNDX
American Funds Small-Cap World Cl ASMCWX
American Funds New World Cl ANEWFX
American Funds American Balanced AABALX
The fundamental investors and growth fund of america have done particularly well for me over the last 10 years. Of all the american fund shares I own, roughly 60-70% are in those two funds. The remaining 30-40% is sprinkled throughout the other funds I listed.
Note - most american funds are front load funds, but the load decreases as you hit asset milestones. Eventually the front load is reduced to almost nothing (or nothing in some funds).
I won't pretend to be an expert in the stock market. But I have done well for myself shooting for decent (6-8%) returns on diversified investments and using the age old dollar cost averaging approach. Started investing at age 19 and hit the $1M mark earlier this year. Compound returns are powerful.
Assets:
1) 225k in an investment property (started as my primary residence, turned it into an investment); $1300/mo to principal + a trivial amount of cash flow; 18 years left on the loan
2) 160k in a commercial building; $1180/mo to principal + $500/mo cash flow; 23 years left on the loan
3) 50k in a residential investment property (my mother in law lives in it); her payment covers my exact costs, which also puts $400/mo into principal; 28 years left on the loan
4) 45k in my primary residence; 8 years left on the loan
5) 150k in retirement accounts
6) 200k to be invested (the money I mentioned in the OP)
7) 30k in checking/savings
8) I'm not counting things like cars because I consider them to be a total loss for the purposes of this thread. All 3 cars are paid off and probably worth 40k.
9) I'm not counting any of my business assets simply to be conservative (it probably amounts to 100k, so not a game changer).
10 ) I'm not counting the 100k in the trusts for my kids' college educations.
Total = 860k + 40k/year from real estate principal/cash flow
My retirement plans:
1) All 4 properties (3 investment + 1 primary) paid off; I may pick up an additional investment property or two and those would ideally be paid off as well
2) Investment properties generating sufficient income to cover the monthly nut (my projections say I should be getting roughly $8000/mo net by then assuming no debt)
3) Kids kicked out of the nest no later than 22 unless they have a damn good reason (this has nothing to do with the thread, but you asked for my plans =P)
4) retirement funds will be used as necessary, but I don't see why I even need any of it at the moment
5) I'm assuming the US will be bankrupt and social security will be 0/mo. Any amount I get from this fund will be spent in its entirety on hookers and blow.
I'm currently saving my wife's entire paycheck in one form or another. That will continue for the foreseeable future, which will amount to at least 30k/year put into something. If I lose the entire 200k tomorrow, it probably won't change a whole lot. We spend what we have to spend and not much more - a behavior that hasn't changed despite several increases in monthly income over the years. I suspect that will continue for at least the next 10 years, which should allow us to continue saving a substantial amount per year.
I'm a big fan of "slow and steady wins the race" with few exceptions. I'm willing to take more risks with the money in question, though, because I feel pretty good about the trajectory of my entire portfolio. Maybe I'm wrong, but that's why I'm asking for advice.
