|
Investment Plan for 25-year old
01-01-2018, 07:17 PM
|
#1
|
Recycles dryer sheets
Join Date: Sep 2009
Posts: 126
|
Investment Plan for 25-year old
Daughter #1 is 25 and has the basics covered -- good, steady job; able to save $3K-$5K/year; contributes 10% to 401(k); and has 6 months of expenses put aside. She has $40,000 additional and is ready to kick-start her investing life. She is fairly risk-averse, especially with the market at an all-time high. We talked about it and here's our current plan:
Open an account at Vanguard and immediately put half the money ($20,000) to work in Wellington. Stick the other half in a money market fund and move $1,000/month into Vanguard's S&P 500 Index fund.
Appreciate any thoughts/opinions on this approach.
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
01-01-2018, 07:52 PM
|
#2
|
Moderator
Join Date: Nov 2014
Posts: 9,181
|
I think that's a great plan. She sounds like she's off to a great start. You've probably already instilled LBYM and saving as much as you can but other than your plan, the best thing she can do (is doing) is saving young. She'll be a millionaire in no time. I'm sure you're very proud.
|
|
|
01-01-2018, 08:10 PM
|
#3
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
|
I think Wellington is way too much in bonds for a 25 year old. My 29 year old uses the Vanguard Target Retirement 2050 Fund... its ~90/10 and includes ~70/30 domestic equities/international equities and has a 0.16% ER.
What I would do is buy $4k of VFIFX and put the $36k in an online savings account... they will pay ~1.25-1.50%.... then a month later add whatever is necessary to increase the VFIFX account balance to $8,000... then a month later add whatever is necessary to increase the balance to $12,000... rinse and repeat increasing the balance by $4,000 each month until the $40k is fully invested... she'll buy more when prices are relatively low and less when prices are relatively high.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
01-01-2018, 08:52 PM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,228
|
Is this retirement savings, or savings for a house, both, something else?
|
|
|
01-01-2018, 09:03 PM
|
#5
|
Full time employment: Posting here.
Join Date: Dec 2013
Posts: 774
|
Buy VTI for next 30 years. Spend the money for the next 30 years.
|
|
|
01-01-2018, 09:05 PM
|
#6
|
Full time employment: Posting here.
Join Date: Aug 2008
Location: The 850
Posts: 980
|
At 25, she should gut it out with 100% equity with money that is not earmarked for specific things over the next 5-7 years.
Doing so will help her understand her risk tolerance as she gets older, and she'll get valuable experience in dealing with the ups and downs of the market. If she can stay the course, she'll be money ahead in the long term. If she can't, she will learn young how to not worry about her investments.
__________________
Stay at home slacker dad 2015-August 2024. With the last kid gone, now actually retired
|
|
|
01-02-2018, 04:28 AM
|
#7
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2015
Location: Michigan
Posts: 5,003
|
Quote:
Buy VTI for next 30 years. Spend the money for the next 30 years.
|
+1
__________________
"The mountains are calling, and I must go." John Muir
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|