Hi everyone, I am 35, hubby is 43, and we have 2 kids ages 6 & 8. We live in CA. We have no debt other than our 15 year fixed mortgage at 2.375% (refinanced in Sep 2020). Anyways, we are just normal working people wanting long term investment for retirement. Our W2 basic annual income is ~300k, not counting hubby’s side gig corporation since it’s fluctuating (~50k-150k/year). We both maximize our 401K contribution & corporation 25% contribution. In addition, I also have work pension plan & maximize 457b plan. I read a book of J.L Collins about Simple road to Wealth so I have most my retirement stocks in VTSAX or SP500 where VTSAX not available (employer’s plan). Am I doing it right? I have extra money every month after al the above since my total expense is only half of my net. Should I buy big stocks like Amazon or continue VTSAX fund? I want to retire when my hubby turns 67 and I turn 60. I am not interested in day trade because my work is already time consuming (40-50 hrs/week) and with 2 kids. Thank you. I have been reading several posts here and truly enjoy them!
I am not sure anyone on here will give investment advice. Because....this is just an internet board...and we have no idea of the the details of your financial lives and situation. What someone invests in is a very personal thing and I for one am not comfortable giving direct advice online to someone I dont know. I will say....the SP500 Index Fund is a great investment. if I had extra money every month....even BIG MONEY....I would not have any hesitation to put it in a SP500 Index Fund. I will also say I am a big fan of the big names like Amazon, Costco, Nike, Google, Microsoft, Apple, etc, etc....I own them all. BUT...there is no way for me to know what would be right for you. I suggest you read The LONG TERM INVESTOR thread and the thread by TomB16. There is lots of good information in both of those thread that will help you to decide what is the right thing for you and your family. Feel free to post anytime in one or both of these threads.
This is the problem with this board, the lack of interest or the lack of traffic. A better board for investment/financial advises would be bogleheads.org. Try your question there. I am a member of that forum but they tend to be a little stifling when it comes to stocks so I joined this board hoping for a more lively conversation (disappointed so far). In any case, if you go to boglehead forum, they all advocate for index fund investing, the set-it-and-forget-it kind of approach. It seems your thinking is similar to mine where I prefer a blended approach where most of my assets will be in ETFs but I also want to buy and hold reputable growth companies as well to increase my return (I got skewered on that forum to make such suggestion). So in my opinion, what you are thinking is fine. All ETFs (like S&P index) or a blend (ETFs and stocks) is fine. You just have to understand your risk tolerance and make sure to do research of the individual stocks you want to own separately before buying them. GL.
Hi Tran. Welcome to Stockaholics. We are delighted you joined us. I read your post on the weekend but I wish to respond with more than a soundbite so am just sitting down to this now. This is an extremely low goal. You should be able to easily retire when you're 53 and he's 60. Easily. I love your trajectory of aggressive saving and planning, even though it is more than necessary for your goals. It's better to get done early than to have to work longer than you wish. You may find, like so many other people, your interest in work withers as you get into your 50s. Work is usually an important part of life but, at some point, you will probably wake up and realize you can't do it anymore. When that day comes, you'll be glad you saved. I could live a nice life on a net worth of $500K and I would die with more money than I started with but I couldn't do it in the San Francisco Bay area, LA, etc. I don't know about VOO vs VSTAX. Small caps are where the big losses, and big gains, happen. I don't have much preference for one over the other but I will say I like your approach. As for individual companies, I'm inclined to think they are not for you. That is based on nothing but a lack of indication that you enjoy doing research on companies. For people who are hands-off, I think an index is the way to go. If you want to pursue individual companies, we can certainly discuss that as much as you like. I wish to share my perspective on JTuber's point regarding the value of this web site. I feel I understand where he's coming from, and his point is not lost on me, but he does not present as a long term investor. Long term investors are boring. There is so little to do. We discuss topics to amuse ourselves, while years pass between trades. Finding a site with tons of chatter and opinions is not a sign of a better site, from a long term investor's point of view. Long term investors should be focused on: - tax optimization (you seem to have a great handle on this) - stability (resist the urge to trade, as you seem to have well in hand) - consideration of macro factors but without responding, 99.9999999% of the time On that basis, Stockaholics.net is the best investment site on the net for some of us. Sites with lots of activity, hot deals, and get rich schemes are ideal for traders. We are not traders. We are investors. Finally, it is crystal clear you have all the ingredients for financial success. I place the odds of you having a terrific, stable, successful life at 100%. In fact, I hope you share some of your thoughts and philosophy, during the time you spend with us. It would be appreciated.
Thanks Tom for the insight. I love how you accurately described how one's desire to work withers when they are 50s and over. I am in that situation. It's just too much things to just focus on work. House. Wife. Kids. Cars. Bills. Health. The list goes on. If I was content with the average market return, yes I would stick to the other forum and just invest in index fund. However I am not content so I looked around and found this forum. I'm not a daytrader. I want to buy reputable growth companies and hold them for the long term. However, if you think "long term" means buying and forgetting, unless you bought index fund, then I feel that it is not correct. Companies change, market changes, competition landscape changes so you have to keep an eye on the individual companies you own and decide whether to stay in or get out when the situation requires. A company that is dominant today doesn't mean it stays like that forever. Same thing with index fund but in the case of index fund, somebody else is making the decision for you (like TSLA being added to SP500). My investment mantra is everyone's situation is different. Age, income background, financial situation, assets, risk tolerance all play a part in how one invests so there isn't a one size fit all. Nothing but index fund? Nothing but stocks? Some stocks some index? Decide what's best for yourself, follow that plan and let life take its course.
Welcome JTuber. Based on your statement below you might like The Long Term Investor thread: "I want to buy reputable growth companies and hold them for the long term. However, if you think "long term" means buying and forgetting, unless you bought index fund, then I feel that it is not correct. Companies change, market changes, competition landscape changes so you have to keep an eye on the individual companies you own and decide whether to stay in or get out when the situation requires. A company that is dominant today doesn't mean it stays like that forever. Same thing with index fund but in the case of index fund, somebody else is making the decision for you (like TSLA being added to SP500)." I have never been a fan of the Boglehead philosophy. Way too limiting and fanatical for me. BUT....to each their own. The description of work at age 50 by TomB16 is exactly why I RETIRED when I was 49. WELL.....not exactly retired.....became a professional musician and full time investor. I could see ZERO reason to stay in business.....in spite of being very successful......when more than 50% of my GROSS earnings was going to pay government taxes of all types. At least success gave me the option to say.......HASTA LA VISTA........and good luck after 22 years in business.
Thank you. I am considering to continue to max the 401K and 457b (for tax benefits) with Index Funds. But with the extra $, I am considering TESLA, GOOGLE, NVDA (just bought ~10k yesterday), AMAZON, & APPLE. They’re well established & will be around for a long time so they should be safe. I am not really a trader but do want to get the most out of my money in the long run. Like 20+ years from now. With Index Funds, it’s easy to just set it automatically & forget about it.
My sister is opposite. She enjoys excitement & she likes being a landlord so she has rental properties. She likes the fact that somebody is paying her mortgage (net even cash flow), CA housing price appreciation, & future cash flow (when mortgage paid off). I hate to be a landlord- just so much headache (I tried for a few years when I had to rent my first house to move for my hubby’s job).
That is a GREAT list of companies as a core group for any portfolio. "TESLA, GOOGLE, NVDA, AMAZON, & APPLE." I have said many times that I consider AMAZON as one of those once in a lifetime companies that should be a CORE holding for any portfolio.
I like all the companies on your list ... except TSLA. Not that I think TSLA is bad, but I am not sure about the EV space long term and TSLA is such a momentum stock. So I would rather not own TSLA at this point (maybe in the future when things are clearer).
Thank you. I was going to purchase & forget about the day to day up & down. I’ll do research on each first.
My mother in law in Asia wants to give us some $ (probably $300-$400k). She said to get a rental property or something. My husband and she think it is safe & will provide passive income. We’re in CA where rental is in demand and house pricing is blooming. We have $ on the side to almost pay cash for a property if needed. However, we are not handy so I told him let’s just throw it into Index Fund and forger about it until we’re retired. Thoughts? I know there are no absolute right/wrong here. I do realize how lucky we are. Just wanna hear other people’s thoughts & wisdom. Thank you!
Rental properties are a lot of work and nearly impossible to make pay, if you are hiring out all the work. Buying all cash, there will be cash flow but that doesnt make it a good investment. Imo, most landlords do not do well. A few have done very well. Id look for a well run reit. Its rental but at scale and it remains luquid.
Hi dude. 2,375 is a very good percentage for a loan. Currently, the most important thing is to find a good mortgage company that will accompany you to the end. Once I took a loan for a house with the amount of 200 thousand dollars, and I was deceived, because it was a fake company where fraudsters worked. I stopped trusting credit companies at that time, but my friend advised me to contact Mortgage Advice Nottingham , from which he took a loan at a small percentage and with the absolute understanding that this is a trusted company. Now it is much easier to take a loan, you can just go to a website, contact a consultant and negotiate, but of course it is best to have your own stable income, and if you take a loan, then you should know from where you'll be paying it back.
