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41 and Looking for Advice!
Old 01-22-2021, 05:12 PM   #1
Confused about dryer sheets
Join Date: Jan 2021
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41 and Looking for Advice!

Hello everyone. I just signed up the other day after finding this site. I must have been living under a rock or something. What a amazing resource this website is and glad I found it. Guess I'm a bit late to the party. Better late than never I guess.

After peaking at my 401k recently, I wanted to check up on everything. I'm not planning on retiring anytime soon but would like to get your input and advise on how to plan and invest for the future.

A little background on me. I'm single and I'm currently 41 turning 42 in 5 months. Started working at 22 after college. Although I didn't setup my 401k until I was 23/24. I contributed only the mininum to get the company match of 3 percent. After a few years under my belt, I ramped it up and was putting in around 10 percent of my salary. Salary was around 60k and now around 110k with the same company.

During that time and as of last week, the 401k has around 480K. The company went through a few 401k company throughout the year. From Mutual of Omaha to Voya. Each firm I have always invested aggressively in whatever plan they had that was aggressive. I will admit I wasn't very educated in investment and if I could go back into time, I would tell myself differently.

At any rate, I didn't know about the Roth IRA plan at all and anything in regard to index fund, etf, etc...Since last week, I have been reading and researching on it. I finally open an account with Vanguard earlier this week. I maxed it out by putting 6k for the 2020 contribution. I then invested 6000 into VTSAX index fund as my research all point to it as a great fund. I will continue to slowly max out my Roth IRA contribution for the 2021 year and on. Also I am going to be maxing my 401k to the 19.5k contribution this year as well and so on.

I live in a low cost city in California. Purchased a house 8 years ago. No debt except mortgage.


House = 190k Mortgage, house value at 430K
Tradition 401K = 480K
Roth IRA = 6k
Brokerage Account = 15K
Cash in bank = 25k
Vechicle = 70k

My lifestyle is pretty simple and don't splurge on anything expensive. Most of my expense is gas. Since I'm in the valley, I go to the beach or mountain quite often. Been dialing it down last year since covid happens.

A few questions. I understand the market is high at the moment so with this year 2021 Roth IRA, I'll be doing 500 per month and either dumping it into the VTSAX or should I be looking at something else. I know there are alot of index out there like VFFVX, VTTSX, well as ETF like VTI, VOO, etc...

What else should I be doing? I'm currently in a relationship and will be getting married soon. Possibly one or two kids. She is much younger than me and has her financial stuff in order. She also own a house.

Any advise or input is greatly appreciated. Thank you and looking forward to someday retiring early!! and getting FI.

Oh I will need to calculate my saving rate and spend rate. I currently track it on a spreadsheet but haven't updated it in awhile so I better get back to doing that.
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Old 01-22-2021, 06:32 PM   #2
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Welcome crazyfire. Your journey mirrors my 401k balances if I were single. I wish I was more educated in knowing that max contribution does not mean max employer contribution percentage. Youíre doing great. Keep maxing out your 401K and Roth. If youíre planning on retiring early, you need to increase contributions to the taxable/ savings bucket. Youíre definitely in your way to FIRE.
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Old 01-22-2021, 07:32 PM   #3
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I'd bump up that cash reserve, maybe by another $25K.
Tick tick tick tock goes the clock on the wall as we're dancing the evening away -- Tick Tock Polka
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Old 01-23-2021, 01:19 PM   #4
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Iíd make sure you have six months of living expenses in cash reserves. If you donít Iíd bump that up until you get there.

Youíre doing great. In your situation an index fund is perfectly fine for your age.

I would start to think about boosting taxable investments if you think there is a possibility of retiring early. Otherwise keep doing what youíre already doing. Congrats you are doing great.
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Old 01-24-2021, 11:04 AM   #5
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Your savings is great at your age. Congratulations!

What stood out to me is the 70k car while you make 110k. Ouch. Now if you keep your cars for 15 years plus that might be reasonable but why would you buy a 70 k vehicle? What’s the payment and terms on that baby?
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Old 01-24-2021, 11:27 AM   #6
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Congratulations on a great start.

Assuming no further contributions, your 401K should grow to ~ 2 mill ( using the rule of 72) by the time you are 60. I'm not recommending stopping by any means.

That $70K car did stand out as something a bit out of line with your statement " lifestyle is pretty simple and don't splurge on anything expensive". Re: gas being your biggest expense. I would highly doubt that based on your 190K mortgage. It may be a good time for you to track your expenses closely for a year to get a good handle on your actual expenses.

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Old 01-24-2021, 11:33 AM   #7
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Originally Posted by crazyfire View Post
... Vehicle = 70k
My lifestyle is pretty simple and don't splurge on anything expensive. ...
Ignoramus et ignorabimus
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Old 01-24-2021, 02:25 PM   #8
Confused about dryer sheets
Join Date: Jan 2021
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Thank you everyone for your suggestion and comments. I'll definitely be increasing my emergency fund more as I increase my contribution.

As for the vehicle value. That is on 3 vehicle. 2 car is 15 years old purchased in 2006. 2nd car is 6 years old. Its been paid off for awhile now. The car still hold their value pretty well and the value is what I could get if I had to sell it.

Like I mention I'm not like my peer who likes to purchase car every few years. I tend to buy once and keep it as long as I can.

At any rate, I appreciate your comments and hope to continue to save aggressively and see what the future hold.

As for gas, the SUV doesn't get that great MPG. I do a lot of outdoor activities hence why my major expense is gas. I have been tracking my daily expensive for the last 4-5 years down to the cent and my gas is the majority of it.
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Old 02-10-2021, 12:54 PM   #9
Confused about dryer sheets
Join Date: Jan 2021
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Hello again everyone. I took some time the other week to update my monthly/yearly spending for 2020.

Bare monthly expense is around 2k which include mortgage, pge, comcast, water, and insurance.

Yearly expense from 2020 including everything (plus gas, vacation, grocery, etc..) is right around 36K. With my emergency fund currently around 25k, I should be okay? Although I will increase it to 40k just to be on the safe side.

On another topic...I took a hard look at my 401K.

Currently this is what it looks like:

38.00% Large Cap
19.00% Large Cap Growth
15.00% Bonds
12.00% Global/International
11.00% Small/Mid/Specialty
5.00% Stability of Principal

There are a lot of Vanguard index fund in there such as

9895 Vanguard Growth Index Fund
8762 Vanguard Value Index Fund
0899 Vanguard 500 Index fund - Admiral Shares

When going into the PDF of each fund, I don't see the symbol? I'm sure it is normal.

At any rate, When looking at the annual performance from the 401k:

2019 was 37 percent
2020 was 26 percent

This is from the account balance performance. Looking at the performance, should I leave it alone or should I tailor the 401 to be more aggressive than what it is now?

Any input on that is greatly appreciated.

Other than the 401k, I have been funding the Roth IRA as well as adding more fund in the brokerage account. Play money which recently (3 weeks ago), I purchase some stocks that has some really nice gain. I'm resisting the urge to cash out of the stocks even though I would be hit with capital gains. And then dumping that money into the Roth IRA limitation for 2021.

Again appreciate any input from you guys as I'm really looking forward to FI!!!!
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Old 02-10-2021, 01:16 PM   #10
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A few thoughts:

First, for allocation purposes you should look at all your holdings as if they were in one basket.

Waaay too many duplicative mutual finds IMO. I suggest that you go to and load up all your US equity funds in the same proportion as you hold them (across all accounts). This would be Portfolio #1. For portfolio #2, use VTSMX/total US market or SPY/S&P 500. My guess is that you will not see much difference. For reference, DW and I have been slowly housecleaning the portfolios and are now down to holding just one equity fund, VTWAX. Very nice.

Once you have settled on the minimum number of mutual funds, then the next step is to arrange them in a tax-efficient manner between your 401K, Roth, and taxable accounts to minimize taxable distributions into taxable accounts.

Re playing with small stock positions, nothing wrong with that but be careful to not let the tax tail wag the investment dog. At the end of the day, the goal is to maximize the money you have in hand, which may involve paying some taxes along the way.
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Old 02-10-2021, 02:15 PM   #11
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Our accounts are at Fidelity.

So I can easily keep watch on my accounts, I keep my portfolio in five different accounts.

And they happen to be the very best performing accounts over the years in their respective areas.

One account in particular that's performed well is getting too large, and I'm going to split it and setup a 6th account.
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Old 02-10-2021, 03:16 PM   #12
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Thank you Oldshooter. I was able to located the ticker symbol for each one except

4062 Voya Fixed Account. I figure this is a cash account?

Anyways I inputted my current Portolio and then did VTSMX = 100, I also added VTSAX = 100 and this is what I got:

Portfolio 1 11.72% -0.68% 13.86% 9.20% 10.18% 13.44%
Portfolio 2 16.82% -0.33% 20.68% 12.41% 13.95% 19.55%
Portfolio 3 16.79% -0.34% 20.55% 12.29% 13.83% 19.55%

VTSMX and VTSAX was pretty close. When going into my account, I don't have VTSMX...I only see 4 Large Cap option I can choose from.

Vanguard 500 Index Fund Adm (VFIAX)
Vanguard Value Index Fund Adm (VVIAX)
AMP Rising Dividend Portfolio
Vanguard Growth Index Fund Adm (VIGAX)

Between VFIAX and VIGAX, the performance of VIGAX looks more attractive? when looking at the hypothetical growth between the two.

Thank you again. I would definitely like to simplified things as well as taking advantage of the performance.
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Old 02-10-2021, 03:59 PM   #13
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Good job! Some cautions about backtesting:

1) The past is not the future so it is futile to design and tune a trading scheme via backtesting. Anyone with an IQ above room temperature can design a winner -- you just look at what went up lately, then go back and buy it. For the same reason, it is not very useful in selecting investments. Past performance really does not predict future results.

2) I do like it, though for comparing investments -- if a complex portfolio's zigs and zags look pretty much like those of a simple portfolio, then I would lean to the simple portfolio. I think the zig/zag correlation is at least somewhat predictive.

3) It's totally unimportant to run the exact horses in the race. Hopefully you can find a total US market fund that's close to VTSMX. If not, maybe make your own. 80% large cap, plus a dab each of mid-cap and small-cap should work just fine. A little quick research on US market composition will give you the size of the dabs; I do not have them in my head.

4) Look only at long time periods -- 20 years if possible. PV will cut off the graph timeline based on when a component mutual fund was started up. This is often a frustration for me; I like at least 10 years.

5) Don't worry about small percentage differences; remember the past is not the future. IMO the zigs and zags are more important when comparing.

Re performance, I suggest: "The Coffee House Investor" by Bill Schultheis Bill just published a sequal, but read this one first.
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