Quote:
Originally Posted by LSPowered
My total net worth is not something I am telling everyone online.
Just looking for additional revenue generators for my retirement & maybe some quick mod money now.
I'm 32 so I have a ways to go before I actually retire. Not looking for a lot of high risk, but some is acceptable.
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He's saying that because no one can make accurate recommendations for you without first understanding your situation. While you don't have to share your net worth and income level, the more information you’re willing to share, the better recommendations you will receive.
Without knowing much about you, I'll share this:
1.) At 32 years old, you have roughly 30-35 years until retirement. With that kind of time horizon, you can afford occasional market pullbacks. Past history has shown that taking on more risk will be rewarded with higher returns. Essentially, invest as aggressively as you’re comfortable with.
2.) Put away as much money towards your retirement as you can. If your company matches 5% then contribute AT LEAST 5% to your 401k plan (assuming your company offers one). If you aren’t taking advantage of the full match, you’re basically reducing your total compensation.
3.) In my opinion, spread out your money evenly. Contribute at least to the level your company matches for your 401k, then contribute the maximum $5500 to your Roth IRA, then contribute the maximum $5500 to your Traditional IRA. Never touch your 401k, Traditional IRA or the gains in your Roth IRA.
4.) Fees add up quick in a smaller account. It looks like you’re already using ETFs and Index Funds which is what I recommend in most people’s situations anyways. Always understand how much you’re paying in commissions, fund expenses, and yearly account fees.
5.) If you’re looking for extra spending money, I’d suggest that you avoid investing in the market. Even with $20k of investable assets, you’re talking about having maybe $2000/year if the market performs well. This may sound silly, but find something you know a great deal about and “invest” your money in tangible assets if you want extra spending money. I personally collect/buy/sell fountain pens, watches, and antiques. That may sound silly to some, but I did extremely well in those areas last year. A normal transaction for me would be to buy a pen for $200-300 and turn around and sell it for $500-600 a week or two later. There’s no way you can consistently touch those kinds of numbers even day-trading with a vast amount of knowledge. Essentially, find something collectible
As far as the funds you mentioned:
CVY-That fund did very well in its category for 2009,2010, and 2011 but it has severely underperformed in 2012 and 2013 (I show that it ranked 210/293 and 234/305 respectively. This is the only fund I'd consider swapping out.
SCHB-Good fund, I like it. It’s performed around the top 25% in its class for the past 3 years
SCHA-Another good fund. I see no reason to swap it out.
XES-Solid. I have used this fund before in a few of my clients’ portfolios. Another good SPDR fund that is very similar is XLE. It tracks the entire Energy sector. I personally like using SPDR’s Sector ETFs because they have extremely low expense ratios (.18) even for ETFs.
FRD- A great company to own in my opinion. My firm has it on their top 10 watch list for 2013.
SWISX-It’s actually an index fund rather than a mutual fund. Looks pretty good overall, not exceptional, but certainly not bad.
All in all it looks like you have a very good looking portfolio. I like that you’re investing very aggressively (it looks like it’s around 90-95% equities/5-10% fixed income/cash). At this point I’d focus more on upping your annual contributions in order to increase the size of your wealth.
Quote:
Originally Posted by scorcherjf
Get a Roth IRA, contribute the maximum amount each year. Capital gains will be tax-free and you can withdraw the money later for important things like a house, etc. If you withdraw early you'll have to pay the tax on the gains you would've had to pay if it were a normal account so it's not too big a deal either.
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This statement is not entirely true. It is true that a Roth IRA can be a great venue to keep emergency funds. It is true that you can withdraw your CONTRIBUTIONS tax free. It is also true that you can withdraw your capital gains. However, if you withdraw your capital gains you will pay taxes AND pay a 10% early withdrawal penalty if made before the age of 59 ½. That penalty is very significant.
It is wise to never take money out of your retirement. However, if you absolutely must, only withdraw your contributions. Never, withdraw your capital gains.