Greetings from a 29 y/o male living in the Bay Area. Intro & 1st question!!

[firemilllenial]

Howdy all!

I'm an underpaid urban planner (working on changing this!) who currently resides in the Bay Area. Originally from Miami, I recently moved here from Denver. I'm a single 29 year old male with no debts! I have a master's degree in planning, and am very excited about this career. I do however want to become FI, so that I'm never dependent on an employer-overlord. After $7,000 has sat in my savings account for a year and a half, I want to invest some of it. Thus enters how I stumble across FI and long-term investing! I've been doing as much reading and listening as possible (MMM, Merriman, Mad Fientist, r/financialindependence, Root of Good, JHCollins, JD Roth, as well as various other off shoots) and have embraced fruaglity, saving, and living within my means. However, I have not yet invested my money and begun to purchase into the magical power of compounding. As for my financial information here are the details:

• Income: $48k (pre-tax), $30k (post-tax)
• Debt: $0
• Monthly Expenses: $1,800 - $2,200 (depending on climbing trips taken)
• Savings: $7.1 k ($3.5-$4k to remain as an emergency fund)
• 401k: $1k (soon to be $4.9k once an old DC account is rolled over)
• Pension: $2.1k
• Net Worth: ~$15.5k

Now, I'm pretty close to opening a brokerage account with Vanguard, and have a vision for a stock fund portfolio (VFINX, VLACX, NAESX, VISVX, VEIEX, VGSIX) but am beginning to realize that will be an upfront investment of atleast $15k... So, since I have $3k at my disposal to invest I'm wondering what a good, first investment into the index fund market might be? Should I be looking at something like Vanguard Target Retirement 2060 (as it's more aggressive)? Can I invest this $3k into ETFs and build a more diverse portfolio within my current financial constraints? I really look forward to hearing what sort of advice, comments, and input you fine folks have!


Cheers,


FIREmillenial

P.s. I'm definitely more adverse to the "Lazy Portfolio" stance.

 

[hnzw_rui]

Personally, I prefer mutual funds to ETFs.

I'm actually in your shoes right now with regards to starting a taxable brokerage account. Since there will be tax consequences in a taxable account if you sell and buy a different fund, I'm inclined to go with something you plan on holding for a long time even if it doesn't quite match your desired AA at the moment. A good starter would be VTSMX/VTI or VFINX/VOO.

Now if this is in a tax advantaged account (tax deferred or Roth), by all means, go ahead with whatever AA you desire now.

 

[firemilllenial]

Personally, I prefer mutual funds to ETFs.

I'm actually in your shoes right now with regards to starting a taxable brokerage account. Since there will be tax consequences in a taxable account if you sell and buy a different fund, I'm inclined to go with something you plan on holding for a long time even if it doesn't quite match your desired AA at the moment. A good starter would be VTSMX/VTI or VFINX/VOO.

Now if this is in a tax advantaged account (tax deferred or Roth), by all means, go ahead with whatever AA you desire now.

Cool! Thanks for stopping by. I'll be keeping my eye on VTSMX and VFINX over the next few weeks :-D

 

[MBAustin]

Welcome, firemillenial, and congratulations on getting off to such a good financial start!

I posted this link yesterday in another thread but you might not find it there - since you like reading on financial matters, you might want to check out some of these classic books for new investors:

https://assetbuilder.com/knowledge-center/articles/a-graduated-reading-list-for-novice-investors

My suggestion would be to keep it very simple to start with, such as the target date fund or something similar. Happy investing!

 

[firemilllenial]

Welcome, firemillenial, and congratulations on getting off to such a good financial start!

I posted this link yesterday in another thread but you might not find it there - since you like reading on financial matters, you might want to check out some of these classic books for new investors:

https://assetbuilder.com/knowledge-center/articles/a-graduated-reading-list-for-novice-investors

My suggestion would be to keep it very simple to start with, such as the target date fund or something similar. Happy investing!

Thanks, MBAustin. As of today, I'm the proud owner of $1k in VTTSX! I'd like to grow this to $10k and then invest it in VTSAX sometime down the road!!

 

[MBAustin]

Good for you, firemillenial! Keep it up!

 

[robnplunder]

My suggestion is go with an aggressive index mutual fund, something like Nadaq 100. Once you have more, you can add another mutual fund for diversification. Keep adding to the fund regardless of how the market does.

If I followed my own suggestion at age 30, I could have retired 5 years ago instead of doing OMY.

 

[firemilllenial]

My suggestion is go with an aggressive index mutual fund, something like Nadaq 100. Once you have more, you can add another mutual fund for diversification. Keep adding to the fund regardless of how the market does.

If I followed my own suggestion at age 30, I could have retired 5 years ago instead of doing OMY.

OK, if you could go back in time and had $6k ($3.5 of which is EF, so $2.5 available for investing) in savings, and a Vanguard account (one which you'd like to remain with one brokerage firm), what would you advise to yourself? Would you add another investment to a taxable individual account?

Keep in mind, you just made your first ever investment in VTTSX just a day prior.

Cheers!

 

[robnplunder]

OK, if you could go back in time and had $6k ($3.5 of which is EF, so $2.5 available for investing) in savings, and a Vanguard account (one which you'd like to remain with one brokerage firm), what would you advise to yourself? Would you add another investment to a taxable individual account?

Keep in mind, you just made your first ever investment in VTTSX just a day prior.

Cheers!

I would move it to a Vanguard mutual fund that invests in Nasdaq 100 (or similar) or biotech. That's what 'I' would have done.

 

[firemilllenial]

I would move it to a Vanguard mutual fund that invests in Nasdaq 100 (or similar) or biotech. That's what 'I' would have done.

Great, thanks for replying. I'm always willing to listen to what those ahead of any path would've done at the stage which I am in currently!

 

[hnzw_rui]

I would move it to a Vanguard mutual fund that invests in Nasdaq 100 (or similar) or biotech. That's what 'I' would have done.

VHT is nice. Too bad I didn't have funds in my sweep account when it hit $120 or I would've bought more.

 

[firemilllenial]

VHT is nice. Too bad I didn't have funds in my sweep account when it hit $120 or I would've bought more.

I'm still pretty unfamiliar with ETFs, and still need to do some further reading on them, and evaluate if they align with what I think I know. Of course, I still have tons of reading to do!

 

[hnzw_rui]

VHT is Vanguard's healthcare ETF. Personally targeting using it as my health/long term care insurance fund (kind of a hedge against crazy high medical inflation ). Not really part of my AA so I'm using no more than 5% of new contributions towards it.