Tropical
Dryer sheet aficionado
- Joined
- Oct 27, 2023
- Messages
- 36
Your thoughts/advice on below "plan" would be SUPER appreciated...
Let's say someone has 300k they want to invest into their (3 fund) portfolio at Vanguard (person got this money by selling their primary residence (worth 600k with no mortgage) and moved into a smaller/cheaper house so they now have about 300k left over they can invest into their Vanguard portfolio). The 300k this person got after selling their house was 100% NOT taxable to the owner (300K was NOT gains... house was bought all cash and actually sold at a loss).
This is one of the things I am confused about... both Traditional IRA and Roth IRA limits the amount you can contribute annually to about 6k. Person NEEDS that 300k to GROW!!! So cannot invest it into money market account and it seems cannot invest it into IRA account either since those IRA accounts "limit" the amount of money you can put in it??
1. ... so if if someone wants to invest a lump sum of 300k... what type of an account would they invest it in at Vanguard so that they can take advantage of compounding interest?
2.It also seems that my TAX FREE 300k... would then suddenly become TAXABLE but I hope NOT the PRINCIPAL amount (being 300K) but rather only taxable on any GAINS on top of that 300k principal amount? If the 300K is immediately TAXED then I am screwed... I will be losing my TAX FREE 300k. I really need to clear this question up because I am very worried about this.... I recently had that 300k in CASH... and I used it to pay off the mortgage on my house... now I feel that was VERY STUPID thing to do!!!
I am studying like CRAZY, reading the Boglehead book etc etc and learning a LOT but have long way to go but my full time job now is to learn much as possible because I need a plan!
Thanks!!
PS: I am 44yrs old (in 3 months). ZERO savings, ZERO assets and living in a 600k house that is holding my equity HOSTAGE!! Feeling DEVASTATED and SICK TO MY STOMACH (this is literally making me physically ill. I was supposed to be retired by age 40!!). I always told myself I would start investing "once I make a lot of money" that was my plan the ENTIRE time!! HUGE HUGE HUGE mistake! I just opened Vanguard account yesterday. My 600k house is holding me HOSTAGE. I have 50k mortgage left on it... so almost fully paid off... but this house is NOT my dream home... it was bought as a very long term 10-15 year investment. I have lived in house for for ONLY 2 years. I need to sell this 600k house (I can EASILY get much cheaper house for 200k to live in).
I sold my car several months ago... I am being frugal as possible. I ride my bicycle everywhere and eat rice and beans.
This house is keeping me POOR because it is holding my equity HOSTAGE... equity that could be earning me compounding interest. I feel I need to invest, like my life depends on it... into my portfolio at vanguard so that in 20 years I will be OK.
My thoughts are... if I can invest 300k into 3 fund portfolio (asset allocation not yet determined)... that in 20 years my 300K might be worth at least 2.5M?? I would be contributing at LEAST $500-$2000/month into my portfolio to help it grow... I will be 65yrs old in 20 years... so my portfolio MUST reflect 20 yrs from now... NOT 30 yrs from now... my life will be over in 30 yrs!!! What is IMPORTANT is what will my portfolio be 15 or 20yrs from now when I can actually still ENJOY life and not be on my death bed!
Plan is to have VTSAX, VTIAX and (no junk) Bonds as my 3 fund portfolio. NOT sure what asset allocation yet...
I need to get my business to profit insane amount each year so I can contribute to portfolio like crazy and MAKE UP FOR LOST TIME!
Let's say someone has 300k they want to invest into their (3 fund) portfolio at Vanguard (person got this money by selling their primary residence (worth 600k with no mortgage) and moved into a smaller/cheaper house so they now have about 300k left over they can invest into their Vanguard portfolio). The 300k this person got after selling their house was 100% NOT taxable to the owner (300K was NOT gains... house was bought all cash and actually sold at a loss).
This is one of the things I am confused about... both Traditional IRA and Roth IRA limits the amount you can contribute annually to about 6k. Person NEEDS that 300k to GROW!!! So cannot invest it into money market account and it seems cannot invest it into IRA account either since those IRA accounts "limit" the amount of money you can put in it??
1. ... so if if someone wants to invest a lump sum of 300k... what type of an account would they invest it in at Vanguard so that they can take advantage of compounding interest?
2.It also seems that my TAX FREE 300k... would then suddenly become TAXABLE but I hope NOT the PRINCIPAL amount (being 300K) but rather only taxable on any GAINS on top of that 300k principal amount? If the 300K is immediately TAXED then I am screwed... I will be losing my TAX FREE 300k. I really need to clear this question up because I am very worried about this.... I recently had that 300k in CASH... and I used it to pay off the mortgage on my house... now I feel that was VERY STUPID thing to do!!!
I am studying like CRAZY, reading the Boglehead book etc etc and learning a LOT but have long way to go but my full time job now is to learn much as possible because I need a plan!
Thanks!!
PS: I am 44yrs old (in 3 months). ZERO savings, ZERO assets and living in a 600k house that is holding my equity HOSTAGE!! Feeling DEVASTATED and SICK TO MY STOMACH (this is literally making me physically ill. I was supposed to be retired by age 40!!). I always told myself I would start investing "once I make a lot of money" that was my plan the ENTIRE time!! HUGE HUGE HUGE mistake! I just opened Vanguard account yesterday. My 600k house is holding me HOSTAGE. I have 50k mortgage left on it... so almost fully paid off... but this house is NOT my dream home... it was bought as a very long term 10-15 year investment. I have lived in house for for ONLY 2 years. I need to sell this 600k house (I can EASILY get much cheaper house for 200k to live in).
I sold my car several months ago... I am being frugal as possible. I ride my bicycle everywhere and eat rice and beans.
This house is keeping me POOR because it is holding my equity HOSTAGE... equity that could be earning me compounding interest. I feel I need to invest, like my life depends on it... into my portfolio at vanguard so that in 20 years I will be OK.
My thoughts are... if I can invest 300k into 3 fund portfolio (asset allocation not yet determined)... that in 20 years my 300K might be worth at least 2.5M?? I would be contributing at LEAST $500-$2000/month into my portfolio to help it grow... I will be 65yrs old in 20 years... so my portfolio MUST reflect 20 yrs from now... NOT 30 yrs from now... my life will be over in 30 yrs!!! What is IMPORTANT is what will my portfolio be 15 or 20yrs from now when I can actually still ENJOY life and not be on my death bed!
Plan is to have VTSAX, VTIAX and (no junk) Bonds as my 3 fund portfolio. NOT sure what asset allocation yet...
I need to get my business to profit insane amount each year so I can contribute to portfolio like crazy and MAKE UP FOR LOST TIME!
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