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Message
Looking for advice
Posted on 12/8/23 at 8:32 pm
Posted on 12/8/23 at 8:32 pm
I am 21 and just bought my first house, plan to rent it out in maybe a year or two and buy something nicer. My bring home is ~2k a week and just started putting into my companies 401K a couple of months ago at 10%. I selected 10 different funds to put into, kind of just clicked random funds without doing any research. I know, dumb. Now I am looking more into it, is it smarter to keep a wide variety or cut it down some? What I started looking at was the 10 year returns, should I try to keep them between 5-7%?
I plan to keep this and not touch it until retirement. I just don’t have many people around me that I trust to ask this question.
I plan to keep this and not touch it until retirement. I just don’t have many people around me that I trust to ask this question.
8
Posted on 12/8/23 at 8:57 pm to Theblairs02
Put it all in low-cost index funds. If they have a S&P 500 Index fund, put it there and never look at it again.
Posted on 12/8/23 at 9:31 pm to Theblairs02
You need to understand WHY you should pick one fund over another. “Past performance is not indicative of future performance”. I would advise against looking at performance % and ratings for the past year/quarter’s “hot fund”.
Realistically, you should only need 3 or 4 funds even in a larger portfolio. Total stock US stock index fund, Total international stock index, total US bond index fund, +/- low cost REIT. Set each fund at your appropriate asset allocation.
KEEP COSTS (ie net expense ratio) LOW!!
I would advise educating yourself further by reading the following books/audio books;
The Little book of common sense investing by Jack Bogle
The Boglehead’s Guide to Investing by Lindauer, Larimore, LeBoeuf.
A random walk down walstreet by Burton Malkiel
ETA
I also do not believe it would be a bad idea to stick it all into a low cost S&P500 index fund for the next 10 years and get your savings rate from 10 percent to 20+ if at all possible. At your age, that would set you up well moving into your 30s
Realistically, you should only need 3 or 4 funds even in a larger portfolio. Total stock US stock index fund, Total international stock index, total US bond index fund, +/- low cost REIT. Set each fund at your appropriate asset allocation.
KEEP COSTS (ie net expense ratio) LOW!!
I would advise educating yourself further by reading the following books/audio books;
The Little book of common sense investing by Jack Bogle
The Boglehead’s Guide to Investing by Lindauer, Larimore, LeBoeuf.
A random walk down walstreet by Burton Malkiel
ETA
I also do not believe it would be a bad idea to stick it all into a low cost S&P500 index fund for the next 10 years and get your savings rate from 10 percent to 20+ if at all possible. At your age, that would set you up well moving into your 30s
This post was edited on 12/8/23 at 9:34 pm
Posted on 12/8/23 at 9:34 pm to Theblairs02
quote:
I selected 10 different funds to put into, kind of just clicked random funds without doing any research. I know, dumb
Stop there. Low cost ratio index fund. 10% at 21 y/o and you’ll be fine
Posted on 12/8/23 at 9:37 pm to Theblairs02
quote:
My bring home is ~2k a week
What @ 21 y/o is paying $8k/mo take home? I’m 26 and jealous FYI hahah
This post was edited on 12/8/23 at 9:38 pm
Posted on 12/9/23 at 6:41 am to Theblairs02
1. Pick the lowest cost fund
2. Over decades small caps index funds might outperform.
3. So pick a low cost small cap, a low cost large cap, and maybe a real estate fund, or international fund. 3 or four funds is fine.
2. Over decades small caps index funds might outperform.
3. So pick a low cost small cap, a low cost large cap, and maybe a real estate fund, or international fund. 3 or four funds is fine.
Posted on 12/9/23 at 8:58 am to makersmark1
SCHB 80%
SCHE 10%
SCHF 10%
Done.
SCHE 10%
SCHF 10%
Done.
Posted on 12/9/23 at 11:00 am to Theblairs02
Toss in 5-10% international and 5% gold.
Posted on 12/9/23 at 11:17 am to lynxcat
quote:
SCHB 80%
SCHE 10%
SCHF 10%
Done.
Pretty much this.
Schwab has a s&p500 index as well which could take advantage of your blue chip swings.
Some years it seems the DJIA is roaring when the rest of the economy hasn't caught up yet. Matthew principle.
Posted on 12/9/23 at 8:58 pm to Roux57
quote:
What @ 21 y/o is paying $8k/mo take home?
Only fans
Posted on 12/10/23 at 8:52 am to Theblairs02
Only need a few low cost index funds, but fine if you choose others. What is more important is that you contribute a decent amount of your own money over many years. Also, don't put all your money into retirement funds. Invest some in taxable accounts that are not tied to retirement. This approach allowed me to "retire" at age 55. Retire in the sense that I quit my normal job.
Posted on 12/10/23 at 11:04 am to Roux57
Oilfield
Posted on 12/10/23 at 11:05 am to Theblairs02
Dude rocking 120k a year but not one course on financial literacy. Great job government!
All these suggestions may be good, but not one question on what are your actual options? Get those posted and we can point you to what to do.
All these suggestions may be good, but not one question on what are your actual options? Get those posted and we can point you to what to do.
Posted on 12/10/23 at 1:11 pm to UpstairsComputer
And if your options don't include a low-cost index fund, someone's arse needs to be kicked.
Posted on 12/11/23 at 10:27 am to RoyalWe
Taking home that kind of money, increase your contributions!!!!
20+%, try & max out every year...
Its really nice when you max-out in say august & rest of the year, youre getting ful paychecks...
as stated index mutual funds
20+%, try & max out every year...
Its really nice when you max-out in say august & rest of the year, youre getting ful paychecks...
as stated index mutual funds
Posted on 12/11/23 at 5:37 pm to slater
This right here. I wish at 21 someone told me this. I started around 25 with 401k and not maxing it out. Wish I would have sooner. Once I started maxing it one could really see the growth. And those first few years of maxing will be a million dollar difference at the end.
Posted on 12/12/23 at 4:41 pm to slater
quote:
Taking home that kind of money, increase your contributions!!!!
20+%, try & max out every year...
Its really nice when you max-out in say august & rest of the year, youre getting ful paychecks...
as stated index mutual funds
Take it from an older guy. Do this. Make the sacrifices to save as much as you can while you are young and give it the most time to grow. Also, get an HSA if you can and do the same. Save so much it hurts. Don't buy new cars or new boats, save and invest the most you possibly can, then rent all those things when you're older so you won't have to maintain them.
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