please advice

[jg35]

I have about 90.000 dollars sitting in a savings account. I want to do something with it .. I am trying to learn about investments so I can retire early .. Any advice on what to do with $90.,000 getting about 1.5 % a month .. I know it is crazy, but I amnot certain where to safely invest. I am 48 yrs old and want to get out of the "rat race" ..

thanks in advance ...

 

[Zipper]

If you are getting 1.5% a month please let us all know where it's at!

Sign me up yesterday.

 

[jg35]

Any advice ... I would like to diversify. I am getting 1.5 %

05/31/2005 Tiered Rate %% APY Earned 1.50% 05/01/05 to 05/31/05 $123.30

 

[Bookm]

Hello jg35. Oh, 1.5% APY. That makes more sense. Anyway, what other investments do you currently hold? And in what type of investment accounts? We have no idea what investment experience you have, and cannot possibly provide an adequate response without knowing a bit more about your situation. Is this supposed to be your emergency fund (if you have one)? If you don't feel safe giving out specifics, tell us only as much as you feel comfortable mentioning, and we'll help where we can.

If you're just learning about investing, I'd leave that cash where it's at for now, get a few books, and start educating myself. I'd probably gain some knowledge about mutual funds, as opposed to jumping into individual stocks. Mutual funds are an easy way to gain a relatively adequate amount of diversification with just a few funds. I'd recommend reading John Bogle's 'Common Sense on Mutual Funds' , or Eric Tyson's 'Mutual Funds for Dummies'. to get started. And I'm sure others can give you their recommendations too. Hope this helps.

Bookm

 

[jg35]

This is my 401K .. I now put 10% of paycheck (pre tax) into 401 K .. 50% in Total bond Mkt Index Fund and 50% in Retirement Savings Trust. I no longer contribute to any of the stocks only the Total bond and Retirement Savings Trust ..

My question, should I move my 401K dollars to more stocks, or keep putting it into the bonds and retirement trust .. The retirement trust is gett $1.00 per share ... Is this a sound investment strategy

Units or Shares Unit or Share Price Balance Percentage of Total Balance


Vanguard Equity Income Fund Investor Shares 289.543 $23.22 $6,723.19 4.94%
Vanguard LifeStrategy Income Fund 1,002.877 $13.51 $13,548.87 9.95%
Vanguard LifeStrategy Moderate Growth Fund 371.516 $17.81 $6,616.71 4.86%
Vanguard Retirement Savings Trust 26,367.780 $1.00 $26,367.78 19.36%
Vanguard Total Bond Market Index Fund Investor Shares 6,398.963 $10.31 $65,973.31 48.41%
Vanguard U.S. Growth Fund Investor Shares 1,058.934 $16.05 $16,995.89 12.48%

Total balance $136,225.75

100.00

 

[Bookm]

Thanks jg. So you have the $136 thousand in the 401k and $90 thousand in a savings account, I assume then. I think I'd be safe to state that you're a conservative investor, by design or not I don't know. Being 48 years old and wanting to retire early, I'd say you prolly will have to stash more of your cash before getting out of the rat race.

Your 401k is mostly bonds and large caps, with a shade of the other assets in the Life Strategy funds. I'm not criticizing, just stating facts and making you aware. With your age and potential remaining years you have left, perhaps your allocation may need adjusting, research adding possibly more smallcaps, REITS etc for example.

Dollar cost averaging into equity funds over several years is a sensible strategy. This of course is prudent, provided this increase in your holdings in stock mutual funds doesn't stress you our, or makes you nervous. Myself, I believe I would need more exposure to various classes of equities if I wanted to draw from my retirement stash for 20 or 30 (or more) years. As it stands now, your 401k is about 22% equities - a bit soft for general standards of someone your age.

Bookm

 

[jg35]

Thanks BookM ..

I do not take offense to any advice. That is why I am on this message board .. to see if I am on the right track .. I am not very good when it comes to investing in stocks, and, therefore, I am pretty conservative. I guess I have to read up on some things. I would like to move some of my 401K dollars to the small caps ... but which ones would I take from ? What would be a good strategy

 

[Brat]

Check out www.fundalarm.com  Look at their list of "no alarm" funds

Read their discussion board.  http://www.fundalarm.com/wwwboard/wwwboard.html

 

[unclemick]

Hmmm

Why not kick back - at age 48 - DCA into 401k - Lifestrategy mod and keeping an emergency reserve - for taxed money DCA into maybe something like Vanguard Tax Managed Balanced. Relax and read some books by Bogle and Bernstein.

Do a POGO - do I like to keep it simple or am I a slice and dicer at heart?

Needless to say I tend toward simple - although less than pure of heart - I enjoy a little sin - er ah slice and dice from time to time.

You have a plan right? Putz - with Firecalc to see what if's. It is a lot of fun. I also like the ORP calc - so I can play devil's advocate with lower portfolio returns.

P.S. - the computer models for Dennis are grouping more toward Florida so I'm pontificating a little tonight - instead of packing for hurricane evac.

 

[Helen]

Careful on Vanguard's tax managed balanced fund (VTMFX) if you are not planning to stay in it a while:

https://flagship4.vanguard.com/VGApp/hnw/FundsSnapshotSec?FundId=0103&FundIntExt=INT


"Redemption Fee
To discourage short-term trading that could disrupt its tax efficiency, the fund charges...

A 2% fee ($20 per $1,000 invested) on redemptions of shares held less than one year.

A 1% fee ($10 per $1,000 invested) on redemptions of shares held at least one year but less than five years.

These fees are paid directly to the fund and therefore are not considered loads. "

-helen