Quote:
Originally Posted by ThaVirus
Eh, I don't take offense to what he said, though I do not think I need a financial advisor. Someone from my bank has reached out a few times over the years about investing and I ignored them. My issue is and always has been that I'm a safe little bitch about my money. I've kept it in a money market all this time exactly because I do not like risk.
But over time, things and people change and I'm finally ready to put a good chunk of this change in the market or a HYSA at the very least to cut the effects of inflation.
I think my emergency fund really only needs to be, idk, maybe $30,000 at most. 6 months of bills/expenses might be $10,000-$20,000. I'm driving a 20-year old car so she could take a shit on me at any moment. Other than that, the rest of the cash should be put to better use. It's just a matter of what type of account/investment, where and how much.
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Ah. I see. That makes more sense from what you were saying before.
If you've got 100K in your dogshit money market account, I'd do the following. I've got my shit with Vanguard, but I think they're all pretty much the same. Choose the brokerage of your choice, just make sure your brokerage has a money market fund that yields.
Open brokerage account.
Link to your bank account. Vanguard has free ACH. It takes a couple days both ways to clear, so it's not a huge deal to get money back and forth.
There are limits for IRAs. If you make more than 138K (single), 218K (MFJ), you can't do contributions to a ROTH. You can do a traditional, but it won't be deductible, so I wouldn't do it. There are some backdoor ROTH options if you make more than that, but you need some CPA/Advisor help. If you're below those levels, fire away on the IRAs.
Start a ROTH IRA. Put $6,500 in it (that's the limit). I have mine in a target dated fund. Mine is in VFIFX, but choose your projected retirement date and set it and forget it.
Put $6,500 in your traditional IRA (That's the limit)
I'd put the emergency fund and car amount in a money market fund. If you're rolling a 20 year old car, probably 20K. So if you have 20K for a car and 20K for emergencies, put 40K in the money market. VMFXX is the one I'm using. The interest will be taxable, but so is the dogshit interest in your bank account.
That leaves 47,000 to invest. I'd stick 35,000 in VOO, it's an S&P Index fund. Then put 12,000 VIGAX. It's a Vanguard Growth ETF. There are a few options here, but I'd just get it in there. Any gains will be taxable when you sell. There will be some dividends that will be taxable income, but so is your dogshit interest in your bank account.
That gets you to 100K. Adjust numbers to reflect what you have.
This is what I'd do. If you're more risk averse than that, you can leave more in the money market, but I'd definitely get some in a S&P ETF and forget about it. If lump sum scares you, put it in VMFXX and split it into 12 increments and Dollar Cost Average it over a year, but after the big pullback, I wouldn't worry about it. Just get it in there.
In terms of management, it doesn't have to be any more than what you're doing to get it in the money market. Vanguard's site lets you pull directly from your account and into whatever fund you want. And you can automate it if you want. Probably from what you're doing, I'd probably just transfer it to the money market and distribute it to wherever you want (IRA, ROTH, Taxed Instruments) once a year or so.
JMO.