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Savings challenge: $100k in five years.

 
Old 06-11-2019, 04:32 PM
  #626  
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Default Re: Savings challenge: $100k in five years.

Great thread. I am sorry I didn't get into learning a lot of this stuff until now (39 years old).

I am starting to gain knowledge on investing so I can build my savings. Ideally I would like to be able to pay off my house and rent it out and move into a "forever home" which is also paid off and live off my investment income for the rest of my days. Unfortunately thats a LONG ways off at the moment.
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Old 06-12-2019, 05:39 AM
  #627  
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Default Re: Savings challenge: $100k in five years.

Originally Posted by JDM_Ej View Post
I am starting to gain knowledge on investing so I can build my savings.
Don't go down the buying individual stocks rabbit hole. Keep 1-2 months bills/spending in checking, 6 mos-12 mos spending in a high interest savings acct (capital one 360 pays 2% right now), and put the rest in a brokerage account in a broad index fund like SPY/VOO/VTI.
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Old 06-12-2019, 05:56 AM
  #628  
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Default Re: Savings challenge: $100k in five years.

Originally Posted by BauleyCivic View Post
Don't go down the buying individual stocks rabbit hole. Keep 1-2 months bills/spending in checking, 6 mos-12 mos spending in a high interest savings acct (capital one 360 pays 2% right now), and put the rest in a brokerage account in a broad index fund like SPY/VOO/VTI.
this is very good advice.
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Old 06-12-2019, 06:04 AM
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Default Re: Savings challenge: $100k in five years.

load up on BABA doe
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Old 06-12-2019, 06:04 AM
  #630  
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Default Re: Savings challenge: $100k in five years.

Originally Posted by BauleyCivic View Post
Don't go down the buying individual stocks rabbit hole. Keep 1-2 months bills/spending in checking, 6 mos-12 mos spending in a high interest savings acct (capital one 360 pays 2% right now), and put the rest in a brokerage account in a broad index fund like SPY/VOO/VTI.
This is great advice.

Have not been able to save as much due to GF/trips/paying off the last of school, but I should be back on track starting in August. Just need to hold out until then.

I did actually buy individual stocks over the years, but little by little; I'm consolidating them into SPY. Everything but my standouts like AAPL, AMZN, etc.
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Old 06-12-2019, 06:40 AM
  #631  
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Default Re: Savings challenge: $100k in five years.

Originally Posted by BauleyCivic View Post
Don't go down the buying individual stocks rabbit hole. Keep 1-2 months bills/spending in checking, 6 mos-12 mos spending in a high interest savings acct (capital one 360 pays 2% right now), and put the rest in a brokerage account in a broad index fund like SPY/VOO/VTI.
Easiest thing to do is open up a Charles Schwab and/or Fidelity account. You can use them for everything and they have outrageously good customer service. I've had a Charles Schwab account for a decade and Fidelity for about 6 years and from day one when I had barely any money in the account they treated me like I had a million dollars in funds with them. You call a number and you get a real person who actually knows what the hell they are doing, not some generic customer service line.

They're an awesome bank. Their cards are awesome (they pay all ATM fees anywhere, no foreign exchange fees, no nothing). Their investment and savings funds rival the best out there in terms of fees and all of it can be linked together. You can have your debt card linked to a money market account and it will even do auto sells for no fees to cover the funds so your money never has to be sitting around doing nothing. They also go out of their way not to screw you if you ever have a problem with overdrafts. Hell, Charles Schwab even goes beyond that and has been known to just give people money to cover their bills lol.

It just makes things so damn simple and they are leagues ahead of any other banks.
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Old 06-12-2019, 07:08 AM
  #632  
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Default Re: Savings challenge: $100k in five years.

Seconded on Schwab and Fidelity, have them both and they are great.
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Old 06-12-2019, 07:57 AM
  #633  
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Default Re: Savings challenge: $100k in five years.

I like Vanguard and that's what I opened up. I bought VFIAX and intended to put money in monthly but I haven't really stuck to that plan. There's gotta be a direct deposit option so I'll probably do that.
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Old 06-12-2019, 09:57 AM
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Default Re: Savings challenge: $100k in five years.

I recently started putting a bunch of funds into a California Muni bond portfolio. I believe the symbol is FRCTX (Franklin California Tax Free Income Fund Class C). It has been a steady 3% for a while now and it is tax free which equates to ~5% inclusive of taxes. Pretty good IMO. It is low risk as well.

This is 100% liquid too! So I've been moving stuff out of Ally and other accounts. I also set up an account for my mom as well.




The other one is The Franklin Income Fund Class C (FCISX) which is higher risk and I'm putting some there as well to split it.

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Old 06-12-2019, 10:11 AM
  #635  
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Default Re: Savings challenge: $100k in five years.

Originally Posted by shamoo View Post
It has been a steady 3% for a while now and it is tax free which equates to ~5% inclusive of taxes.
What does this mean? Tax free when you sell?
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Old 06-12-2019, 10:15 AM
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Default Re: Savings challenge: $100k in five years.

Originally Posted by Tennobanzai View Post
What does this mean? Tax free when you sell?
Means whatever money you make from it is tax free.

Put in $100K and have $103K in the end. You get $3K and it is not taxed.

EDIT: It is a managed fund, so you need someone to set it up for you. You can't do it yourself.
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Old 06-12-2019, 10:20 AM
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Thanks. Sounds good. I'll look into it.
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Old 06-12-2019, 10:29 AM
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Default Re: Savings challenge: $100k in five years.

Originally Posted by Tennobanzai View Post
Thanks. Sounds good. I'll look into it.
No prob, if you need a contact, let me know. One of my best friends is actually my finance guy and handles my family's stuff (including my parents retirement accounts).

BTW the second one that's slightly higher risk is NOT tax free. It is a normal account. I like it because it is 100% liquid.
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Old 06-12-2019, 10:46 AM
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I'm not sure what i'm going to do with my saved money. Most advice people say is to keep it in savings if you're close to a big purchase. My big purchase (Property) might be in a 1-10 years so I might just try to balance out any risk.
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Old 06-12-2019, 10:57 AM
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Default Re: Savings challenge: $100k in five years.

Originally Posted by shamoo View Post
I recently started putting a bunch of funds into a California Muni bond portfolio. I believe the symbol is FRCTX (Franklin California Tax Free Income Fund Class C). It has been a steady 3% for a while now and it is tax free which equates to ~5% inclusive of taxes. Pretty good IMO. It is low risk as well.

This is 100% liquid too! So I've been moving stuff out of Ally and other accounts. I also set up an account for my mom as well.




The other one is The Franklin Income Fund Class C (FCISX) which is higher risk and I'm putting some there as well to split it.

those expense ratios. Jesus. 1.14% and 1.12%? VTI is 0.03% That's why I prefer to stay away from Mutual Funds. Expense ratios are high and their yields are not hard to beat.


Originally Posted by shamoo View Post
EDIT: It is a managed fund, so you need someone to set it up for you. You can't do it yourself.
Depends on your brokerage I guess. I just checked, and its available on etrade.
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Old 06-12-2019, 11:00 AM
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Default Re: Savings challenge: $100k in five years.

Originally Posted by Tim2179 View Post
those expense ratios. Jesus. 1.14 and 1.12%? VTI is .04% That's why I prefer to stay away from Mutual Funds. Expense ratios are high and their yields are not hard to beat.
Are you saying the 1.14% and 1.12% is high or low?

In this case, you get the full 3%. That extra ER is baked in.
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Old 06-12-2019, 11:02 AM
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Default Re: Savings challenge: $100k in five years.

Originally Posted by shamoo View Post
Are you saying the 1.14% and 1.12% is high or low?
hella high
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Old 06-12-2019, 11:04 AM
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Default Re: Savings challenge: $100k in five years.

Originally Posted by Skelly View Post
hella high
Ah okay, see my edit tho. 3% tax free is what you get.

For things with no term and liquid and low risk, it is one of the best out there. But that's also why I'm diversifying a bit and putting a little into that other higher risk one.
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Old 06-12-2019, 11:05 AM
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Default Re: Savings challenge: $100k in five years.

Originally Posted by Skelly View Post
hella high
yes
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Old 06-12-2019, 11:20 AM
  #645  
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High expense ratio but tax free makes it attractive
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Old 06-12-2019, 01:10 PM
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Default Re: Savings challenge: $100k in five years.

Well that's the caveat to C shares. Generally more appropriate for short term, because they have a higher ER, but no upfront load to buy in. (As opposed to A shares which have lower ER but usually a high sales charge to buy in) Muni bonds are great because they're tax free at the state/local/govt level (as long as their bought in the same state that you reside) but be careful for higher earners, as you can be still subject to tax if you're subject to Alternative minimum tax (AMT for higher net worth )

Also, bonds have their own risk associated with them. They work inversely with interest rates, so in higher interest rate environments bonds tend to decrease, where as lower interest rate environments, bond prices are higher. Just take that into consideration, you don't want to have a large concentration in bonds, as it's really meant to hedge against varying interest rate environments.

The market is saying that the Fed may cut rates 3 times by end of year, so we'll see how that plays out for the bond market.

Honestly an ER of 1.14% isn't terribly high. There are C share's that are 1.5%+ I've seen them as high as 2%
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Old 06-12-2019, 05:52 PM
  #647  
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Default Re: Savings challenge: $100k in five years.

Is it advisable to diversify said bonds?
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Old 06-12-2019, 05:56 PM
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Default Re: Savings challenge: $100k in five years.

Originally Posted by BauleyCivic View Post
Don't go down the buying individual stocks rabbit hole. Keep 1-2 months bills/spending in checking, 6 mos-12 mos spending in a high interest savings acct (capital one 360 pays 2% right now), and put the rest in a brokerage account in a broad index fund like SPY/VOO/VTI.
Ally is 2.2 percent iirc
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Old 06-12-2019, 05:58 PM
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Default Re: Savings challenge: $100k in five years.

Originally Posted by Skelly View Post
Is it advisable to diversify said bonds?

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Old 06-12-2019, 06:02 PM
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Default Re: Savings challenge: $100k in five years.

Originally Posted by solsisters View Post
Ally is 2.2 percent iirc
CIT is sitting at 2.4%.
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