Hello everyone.
I "discovered" this site from the MSN money boards where it has been recommended several times. I thought I would take the plunge and register and put up my first post.
I am 33 yrs old and married. My wife and I had a negative net worth about 3.5 or so years ago when we decided to really turn it around and begin saving in earnest. We now have about 100k in retirement accounts (401k, TSP, and two Roth IRAs) and I recently opened my first taxable account at Vanguard (where the Roths are). While we do max the Roths we aren't yet able to max the 401k/TSP accounts yet but we are getting there. I decided to open a taxable account anyways because while maximizing our retirement contributions is my eventual goal, during a downturn I am not going to be able to use those funds to sustain us at all. I felt having the safety net of some other funds set aside and yet at least attempting to let them be productive would be a good idea.
I currently have about 4k or so in a VMMXX and contribute ~1k per month which is intended for next years Roth IRA contributions. In addition to that I have recently made a contribution to the Vanguard Star Fund (10k).
The money in the Star Fund has no initial purpose but might be used down the road to help out my son (11 years old) with college expenses for example. I moved the money from the MMF because of the low yeilds these days and because I didn't need the excess sitting there considering my contributions over the course of the year will take care of next years IRAs. I am wondering if Star is perhaps the best option for the taxable account or if I should perhaps go with a less bond intensive fund such as VTIVX or the like?
I realize that I could easily split the money among equity funds to lower capital gains and dividend distributions (I had thought about 4k to VFINX and 3k each to VEXMX and VGTSX) but something was pulling at me to be a bit more conservative with the taxable account. What do you guys think about that mix?
By comparison our 401ks are 100% equities (60% US TSM and 40% Intl index funds) and both of our Roths are in VTIVX.
While I am at it, I might as well ask this too.
We have about 20k or so in Savings not including the 10k sitting in Star. I have a second mortgage on my home (we just purchased our first home in late '05, I know it sucks to be us) which has 27k left at $400 per month (down from 46.5k) that is at 8.25%. Now our home has lost about 20% of its value (we are upside down but with no intention of moving for at least 5 or 6 years) but I am still VERY tempted to just pay off of the 2nd mortgage anyways. On the one hand if I paid it now it would take 68 months to break even on the payments. If I don't pay it now I could service the mortgage for another 75 months (not including any interest or gains on my current savings). At my current rate it would take 96 months to kill the loan naturally. This is the issue I tussle with the most from week to week. So far I have resisted the temptation to just take the cash and kill the loan. But I would love to hear some other people thoughts....
Anyways, I look forward to surfing the board and learning a TON from all of the great people here. I hope to retire around 58 or so but we shall see how it goes.
I "discovered" this site from the MSN money boards where it has been recommended several times. I thought I would take the plunge and register and put up my first post.
I am 33 yrs old and married. My wife and I had a negative net worth about 3.5 or so years ago when we decided to really turn it around and begin saving in earnest. We now have about 100k in retirement accounts (401k, TSP, and two Roth IRAs) and I recently opened my first taxable account at Vanguard (where the Roths are). While we do max the Roths we aren't yet able to max the 401k/TSP accounts yet but we are getting there. I decided to open a taxable account anyways because while maximizing our retirement contributions is my eventual goal, during a downturn I am not going to be able to use those funds to sustain us at all. I felt having the safety net of some other funds set aside and yet at least attempting to let them be productive would be a good idea.
I currently have about 4k or so in a VMMXX and contribute ~1k per month which is intended for next years Roth IRA contributions. In addition to that I have recently made a contribution to the Vanguard Star Fund (10k).
The money in the Star Fund has no initial purpose but might be used down the road to help out my son (11 years old) with college expenses for example. I moved the money from the MMF because of the low yeilds these days and because I didn't need the excess sitting there considering my contributions over the course of the year will take care of next years IRAs. I am wondering if Star is perhaps the best option for the taxable account or if I should perhaps go with a less bond intensive fund such as VTIVX or the like?
I realize that I could easily split the money among equity funds to lower capital gains and dividend distributions (I had thought about 4k to VFINX and 3k each to VEXMX and VGTSX) but something was pulling at me to be a bit more conservative with the taxable account. What do you guys think about that mix?
By comparison our 401ks are 100% equities (60% US TSM and 40% Intl index funds) and both of our Roths are in VTIVX.
While I am at it, I might as well ask this too.
We have about 20k or so in Savings not including the 10k sitting in Star. I have a second mortgage on my home (we just purchased our first home in late '05, I know it sucks to be us) which has 27k left at $400 per month (down from 46.5k) that is at 8.25%. Now our home has lost about 20% of its value (we are upside down but with no intention of moving for at least 5 or 6 years) but I am still VERY tempted to just pay off of the 2nd mortgage anyways. On the one hand if I paid it now it would take 68 months to break even on the payments. If I don't pay it now I could service the mortgage for another 75 months (not including any interest or gains on my current savings). At my current rate it would take 96 months to kill the loan naturally. This is the issue I tussle with the most from week to week. So far I have resisted the temptation to just take the cash and kill the loan. But I would love to hear some other people thoughts....
Anyways, I look forward to surfing the board and learning a TON from all of the great people here. I hope to retire around 58 or so but we shall see how it goes.
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