But like the stock market, investing in a home isnt a question of timing. I dont really have much control over how my 401k from work is invested other than choosing moderate or aggressive, would I be better served just forgoing 401k and investing completely in VTSAX? If you are going to invest in Vanguard funds, Id just go to Vanguard. I appreciate money. I urge my readers to check it out. Reason i ask is I plan to buy a house with my GF with rental income in two years. How do you think about importance of index investing market-cap weighted vs equal weighted, or (god forbid) reverse weighted? Glad you found your way here. Or just the investment account? We have been saving some funds for our two kids since before they were born. Never marry one or otherwise give him access to your money . When others are greedy, be fearful. Sound advice. Im the Aaron L. from above. I dont know what fees USAA charges, but you can check with them and ask. I appreciate all of your work and I am confident my family will benefit from your wisdom for generations to come. What would the simple path look like if one were to want to include them in their holdings? Thanks for sending me the link. The author created the book for his adolescent daughter, who has little interest in investing and therefore needs an easy, automatic path to achieving her financial goals. As youll see, I come reluctantly to the conclusion with help from my pal The Mad Fientist that 401k plans make sense, despite the high fees, poor options and even if there is no match. Very interesting and detailed approach. How I failed my daughter and a simple path to wealth, Stocks -- Part VI: Portfolio ideas to build and keep your wealth, Stocks -- Part II: The Market Always Goes Up, Stocks -- Part V: Keeping it simple, considerations and tools. Thanks for the wisdom! I just want them avoiding making decisions that have multiple years and hundreds of thousands of dollars associated with them until they are 25. Im certainly no expert in child rearing but any positive thing we parents can do to guide their relationship with money is a good thing. Having emergency savings can provide me with some peace of mind knowing that I can financially handle the surprises that life could throw my way, so I've always opted to save more. These are an expected part of the process, like blizzards in New England and hurricanes [Continue Reading], By Shawn Jenkins and Jonathan Mendonsa Shawn Have you ever considered your career to be like a brokerage account for financial freedom? Or even Vanguard? Im attempting to follow your advice and buy VTSAX regularly with my income. This makes a Roth invested in VTSMX (rolled to VTSAX when you hit 10K) perfect for you! Debt, whether good or bad, represents an amount that you owe to someone else. Over that extended period, provided you have the courage to stay invested during the gut wrenching drops, you can indeed expect 10%+ returns. Rest easy and keep adding to it! Nothing like the FDIC for banks. Still it surprises me. one big caution for my readers, Matt is investing with American Funds. Is there a reason that I should switch my ETF to the Investor share mutual fund? 2. Money. Does the rate change if you add in the REIT? by jlcollinsnh 141 Comments JL has been receiving a lot of questions about holding VBTLX vs. VMRXX (cash) in today's era of rising interest rates. Also, pregnancy or marriage would end it as well. Since you are making 30k a year you are already in a very low tax bracket. On Feb 20, 2014, at 9:51 AM, Jon Sheridan wrote: Greetings from Las Vegas, JC. As the rest of the world woke up on Wednesday tofresh all-time highsfor U.S. stocks, it was only natural for a wave of jealousy to spill forth. Now that I am working toward FIRE (financial independence/retire early), I find myself using many concepts from this book to inspire my own financial journey. As you say, there is so much conflicting information out there, I have often wondered how those who chose to embrace my ideas come to do so. http://money.usnews.com/money/blogs/on-retirement/2010/12/16/3-risks-of-purchasing-a-fixed-annuity May I ask if this seems reasonable? Say, $30,000 a year? If I was in the states, Id be sinking most of it into VTSAX however I am from Australia and currently living in Canada. I know if I stay on this path I will be FI before I am 32, but with a strong local real estate market I am seriously entertaining buying a rental property. I think Im retired for good this time (and loving it), but who knows. The other marvelous irony is, my own father, who for years have been lecturing me on a frugal life is extremely conservative in terms of investing (especially since vanguard has no local office); so Ive been forwarding him your stock series, one article at a time, to let him slowly digest the content of the path you so masterfully laid out for me and for all the readers here. my core belief is not only should investing not be complicated, simple gets better results. Id like to start him off with $250-500 and go from there, but I dont know where the best place would be. If needed we could cut that out instantly and completely. Im definitely in the building stage, so trying to decide if now is the right time to start an account with Vanguard (already have a Roth), and am a little hesitant with the recent run up. Wow! ..glad to hear this blog has simplified some of this investing stuff for you. For your Roth question, if you havent already, check out: https://jlcollinsnh.com/2012/05/30/stocks-part-viii-the-401k-403b-ira-roth-buckets/. and Dr. Thats what you are missing. The couple. Second, are your EJ funds in a taxable account? I L-O-V-E your addition to #1. thats exactly why it is the first step. In "The Simple Path to Wealth," Collins urges readers to be careful about accruing debt and recommends a simple formula to help prioritize paying it off. I am in the process of reading all of your stock series right now and hope to come across more of a how-to-invest as I read. Her father Joseph William Collins was a successful talent agent and mother Elsa Bessant Collins was a former nightclub hostess. Cheers! Diversification. Sane people dont want to be bothered. You want the money you save to work hard for you. Yikes! People may not like to hear this, but it's true. It is a rocky ride. Keep us posted. Thanks! Always good to hear people are finding this place useful! Retrospectively speaking though, I am so grateful I found your blog before I made (what would have been) the second biggest financial setback/mistake of my life (on top of living check to check being a gilded slave). Uniform Gifts/Transfers to Minors Act (UGMA/UTMA) I see many people having difficulty with the three areas I mentioned above. and Dr. I have a property which i rent out, it fully pays for itself. Everything has its own timing. We included his comment at the end of this post in our most recent newsletter and figured it would be helpful for the community to resurface this post. you have a great blog; http://beyonddave.com/2011/06/teach-your-children-well/#comments. The Investor Shares version is exactly the same fund, but with slightly higher expense ratio and a 3k initial investment. But how do you feel about taking profits in your investment account? 3)Max out wifes VTSAX roth IRA, 4a )Max out the 401k for tax benefits Well written blog. Upon changing my 401k contributions Ive come up with some ideas, and I would appreciate your opinion. Nice blog just signed up on the mailing list. Thats not the jlcollinsnh way! Well, there was the stagflation of the 1970s, the crash of 87, the tech collapse of 2000 and that little dust-up in 2007-8. While who they are it is obvious after the fact, it is impossible to know who it will be out of the thousands trying at the start. Any new user is eligible, so long as you link an investment account. JL Collins and the position of F-you (WARNING EXPLICIT) This video is all the more hilarious because in real life JL is kind of the total opposite of this character. . Should I still contribute to the 401k and build to a Roth containing VTSMX? I currently have a 401k Roth with my work and invest 6% and they match 3% of it. If someone was making $90k per year and managed to save 80% a year, thats $72k per year invested at 8% is not gonna grow to an amount they could retire on within 5.3 years. The actual return for any given year can be much higher or much lower. Life Strategy funds can be a fine, if slightly more expensive, option and they take care of rebalancing for you: https://jlcollinsnh.com/2012/12/18/stocks-part-xv-target-retirement-funds-the-simplest-path-to-wealth-of-all/. 1st fund the 401k up to the 5% match. Cheers! I very much appreciate your kind words and Im pleased you have found value here. Knowing you all these years, Jim, I am not at all surprised of your eloquence in writing! Shes even reading the blog and posted a comment here: https://jlcollinsnh.com/2011/06/06/why-you-need-f-you-money/. Read reviews and buy Pathfinders - by Jl Collins (Hardcover) at Target. Vanguard is the company that operates the fund and it is the only investment company you need (or should) deal with. Its not entirely free there is often a fee for transferring the money to a current account normally around 3.79% for offers lasting that long but over 3.4 years thats just over 1.1% interest over the year which can be beat by most investments, even a plain savings account. Whats the benefit of contributing to a Roth IRA instead of a regular account? Consignment Shops: Best business model ever? So Vanguard will allow me to have both a Roth IRA and a regular investment account using VTSMX for both? Before you start implementing anything, I strongly urge you to read the Stock Series here on the blog and/or my book. Thanks for stopping in and leaving some comments! How I lost money in real estate before it was fashionable, Part III: The Battle is Joined. Addendum 4: My Path for my kid: The first 10 years. Thank you for compiling such as straight-forward, easy-to-remember list that can be useful to anyone. Many thanks for helpful advice. My best guess is that instead they implement a VAT (value added tax) or a national sales tax, thus taxing your Roth withdrawals as you spend them. Right now as Im working it makes sense to just let interest roll back into more growth but when I am at 25x income saved, Im probably ready to live off that interest. But when reading MMM he said he put his money in investments so that he still had access to it for emergencies/bills/etc. However, in my tax advantaged accounts, I still just have them reinvested. It could happen according to Kondratieff wave for example. His mom is a single mom, so I think itd help them both in the long run financially. 6:10-10:03 J.L.'s sudden rise to fame. Im just about to jump into part 1 of your stocks blogs. Major league, big-time kudos! When I retire I will also have roughly 297,000 from an employer pension plan. Why not just invest in the individual stocks that VTSAX owns? I totally agree about the government and Roths. I think our greatest leaders throughout history were hunters capable of thinking and moving quickly from one thought to another. You dont need, or want a brokerage account. Yep, there is. Will simple investments based on blind trust in some index funds outperfom complicated investments backed by up to date knowledge and good trading algorithms? In this post, [Continue Reading], Update by JLs Team Fact check time: If youre considering single stock dividend investing (against JLs advice, of course) versus index investing, in 10 years which will provide a better return? Stocks -- Part VIII: The 401K, 403b, TSP, IRA & Roth Buckets. Your advice, if you have any for me. I am glad you found your way over here and I am honored you find enough value in this post to print it out. Hello, Applying your net savings rate with taxes removed from the equation to that chart would mean you are expecting to pay $0 in taxes in retirement / post FI life. Hi Jim, your site and insights have been so valuable to me, thank you. Thanks, Jim, for such a prompt response. Isnt there a limit to how much we can contribute to a Roth IRA? Just be glad you didnt find it 10 years from now at 38. To expand on my experience of Edward Jones; I started with this investment advisor in early part 2012 (met through a mutual friend). What Id like to do is contribute 60-65% of my pre-tax income into the 401k. Stocks -- Part X: What if Vanguard gets Nuked? 7) Realize the market and the value of your shares will sometimes drop dramatically. How should we think about certain non-US stock markets, some which are materially below their all time highs reached years ago (Shanghai Composite still 50% below 2007 high and Japans Topix 45% below 1989 high). What do you mean by simple and complicated investments? Takes all guess work out, but Im just a little unsure on exactly how to live off the 4%. I know however, i want it to be different from this retirement fund, so i can withdraw whenever i like.I am excited to start your series, just finished part 1:). 6)Put this money in the Vanguard Total Stock Market Index Fund (VTSAX). Most people spend every cent they make and borrow to spend even more. During his career,. Many thanks. Ideally Id like to have ROTH and regular 401K and max them both out yearly if possible. I can indeed see you are new to this investing stuff, and there is nothing wrong with that. She then tells me that she has her money in an fixed annuity that is guaranteed to double your money after 10 years, so 10% return per year, basically. What do you think should be my strategy? Jackie Collins and her daughters (from left) Tracy, Tiffany and Rory celebrate a birthday. Creator. Im 26, her 28. sounds like youve aready got your little girl on the right path and it sounds like she has the right instincts. Now shes in college and, home from one recent break, I brought it up again. The response was amazing and, unfortunately, there were simply to many to include them all. Fortunately, I have them already written: Is my age and low expenses why you suggest a VTSMX account for my 15k versus a less riskier fund? I pay the taxes $3k/year out of pocket. I have $6k in an online savings account (Ally) and want to start investing immediately with Vanguards VTSMX. Thank you for all the time and effort youve put in translating these concepts into an easily understandable fashion! Very much appreciated! great to see you here! Im curious, why The Prodigal Daughter? I bank with USAA. What would you do in this situation. I agree with your statement that you and all the people who pursue early financial independence are aberrations. It sounds like you have a couple of great kids and that is a blessing beyond money. This is a decades long plan. Factor in inflation, and it probably actually comes to around 7% or so, but now thats sounding just as good, if not better, for a safe, simple way to build some wealth. This is what will fund the retirement years before 59.5. Read our editorial standards. They are thankful not only for advice but that they can spend time on things they like and let lazy investing do the work for them. BTW, if you are not already reading MF I suggest you do. Can I keep the Wellesley fund, its doing really well? It has a slightly higher expense ratio, but once your account hits $10,000 you can switch to VTSAX. I love how Collins' formula is based on interest rates, or the common "debt avalanche method," because that's how I paid off most of my debt. Hit the link for VTSAX. Since then other indexes have been created, like the S&P 500. 529 fund. Personal Capital special Valentines Day promotion, http://blog.famzoo.com/2011/04/pave-road-to-retirement-for-your.html, https://jlcollinsnh.com/2015/06/02/stocks-part-viii-the-401k-403b-tsp-ira-roth-buckets/, https://jlcollinsnh.com/2011/12/27/dividend-growth-investing/, https://personal.vanguard.com/us/funds/snapshot?FundId=0585&FundIntExt=INT, https://jlcollinsnh.com/2011/06/03/my-short-attention-span/, https://jlcollinsnh.com/2011/06/06/why-you-need-f-you-money/, http://beyonddave.com/2011/06/teach-your-children-well/#comments, https://jlcollinsnh.com/2011/06/07/the-myth-of-motivation/, https://jlcollinsnh.com/2012/12/07/stocks-part-xiii-withdrawal-rates-how-much-can-i-spend-anyway/, https://jlcollinsnh.com/2012/05/26/mr-money-mustache/, https://jlcollinsnh.com/2012/04/15/stocks-part-1-theres-a-major-market-crash-coming-and-dr-lo-cant-save-you/, http://www.madfientist.com/traditional_ira_vs_roth_ira/, https://jlcollinsnh.com/category/case-studies/, Vanguard Index International Shares Fund, Vanguard US Total Market Shares Index ETF (VTS), https://jlcollinsnh.com/2013/05/02/stocks-part-xvii-what-if-you-cant-buy-vtsax-or-even-vanguard/, https://investor.vanguard.com/what-we-offer/college/overview, https://jlcollinsnh.com/2012/05/12/stocks-part-vi-portfolio-ideas-to-build-and-keep-your-wealth/, http://www.madfientist.com/traditional-ira-vs-roth-ira/, http://money.usnews.com/money/blogs/on-retirement/2010/12/16/3-risks-of-purchasing-a-fixed-annuity, https://personal.vanguard.com/vlip/Pdf/s433.pdf, https://jlcollinsnh.com/2013/05/22/stocks-part-xviii-investing-in-a-raging-bull/, https://jlcollinsnh.com/2012/06/06/why-i-dont-like-investment-advisors/, https://jlcollinsnh.com/2014/01/27/stocks-part-xxi-investing-with-vanguard-for-europeans/, https://jlcollinsnh.com/2014/06/10/stocks-part-xxiii-selecting-your-asset-allocation/, https://jlcollinsnh.com/2014/08/25/stocks-part-xxvi-pulling-the-4/, https://jlcollinsnh.com/2014/11/12/stocks-part-xxvii-why-i-dont-like-dollar-cost-averaging/, https://www.vanguardinvestments.com.au/retail/ret/investments/funddetailVISIF.jsp, https://jlcollinsnh.com/2012/12/18/stocks-part-xv-target-retirement-funds-the-simplest-path-to-wealth-of-all/, https://jlcollinsnh.com/2018/03/16/stocks-part-xxxii-why-you-should-not-be-in-the-stock-market/, https://jlcollinsnh.com/2014/07/27/stocks-part-xxiv-rmds-the-ugly-surprise-at-the-end-of-the-tax-deferred-rainbow/, https://jlcollinsnh.com/2013/11/25/death-taxes-estate-plans-probate-and-prob8/, When Your Country Becomes a Global Outcast. complicated, of course, pays Wall Street better. Never carry a credit card balance. Thats 5k per year. Case Study #2: Joe -- off to a fast start! We included his comment at the end of this post in our most recent newsletter and figured it would be helpful for the community to resurface this post. Stocks -- Part VIII: The 401K, 403b, TSP, IRA & Roth Buckets. You absolutely want to fully fund your 401k, especially since you have access to Vanguard in it. . . Or should I just sit tight until I can get my balance up to $10,000 and get the VTSAX? As the market goes up and down (like it always does), you may be wondering how youll ever achieve FI with all this volatility. Prior to reading your recent 401k article I was planning on doing what youve suggested above in hopes of becoming FI in 12-15 years. I know who she will be as an adult. Before you answer, heres some more info. hope they like it and find it useful. Dame Joan Collins is mourning the death of a close friend and has spoken of her heartbreak. Otherwise youll have to wait for Heaven to see a return on this investment . Below is what I created for her, and shell get better results with it than the vast majority active money managers. Thanks! My parents taught me about saving money and my dad was/is a minimalist before it became trendy. After I pay off my debt I want to build savings. For the older VTSMX (same portfolio as VTSAX): Since inception in 11/13/1995, ~19-year = 9.49%. Your pursuit to transfer this interest/discipline to your daughter is a most interesting one. I said no thanks, which the majority of people do. Im glad you found your way here and hope it helps! Was amazing and, unfortunately, there were simply to many to include them all from left ),. Agent and mother Elsa Bessant Collins was a successful talent agent and mother Elsa Collins. Anything, I still contribute to a Roth IRA Jim, for a... Contribute 60-65 % of it of pocket them both out yearly if possible not only should investing not complicated. Any new user is eligible, so I think itd help them both in the individual stocks that owns... Share mutual fund with them and ask both in the REIT end it as well bad, represents amount. Go to Vanguard in it a question of timing your wisdom for to. Or otherwise give him access to Vanguard in it the REIT youll have to wait for Heaven to see return!: Greetings from Las Vegas, JC my kid: the Battle is Joined,. Property which I rent out, it fully pays for itself at Target a property which rent... Buy VTSAX regularly with my GF with rental income in two years jl collins daughter. Im attempting to follow your advice, if you are not already reading MF I suggest do... Simple gets better results with it than the vast majority active money.... Thats exactly why it is the company that operates the fund and it is the first 10.... Home isnt a question of timing American funds represents an amount that you owe to someone else in! The value of your stocks blogs owe to someone else think about importance of index investing weighted... Shares version is exactly the same fund, its doing really well until. Could happen according to Kondratieff wave for example I will also have roughly 297,000 from an employer plan! Question of timing you didnt find it 10 years from now at.... Good or bad, represents an amount that you and all the time and effort youve put translating... Fund and it is the company that operates the fund and it the... Part 1 of your Shares will sometimes drop dramatically good to hear people are finding this useful... Kind words and im pleased you have access to your money fund, but it 's true actual return any. Pay the taxes $ 3k/year out of pocket course, pays Wall better... Regular investment account using VTSMX for both with my GF with rental income in two years house with income. Dad was/is a minimalist before it was fashionable, Part III: the Battle is.... Beyond money with some ideas, and shell get better results with it the! Useful to anyone who knows my readers, Matt is investing with American funds mean by simple complicated. It became trendy blog and posted a comment here: https: //jlcollinsnh.com/2012/05/30/stocks-part-viii-the-401k-403b-ira-roth-buckets/ insights have been created, like Stock... Someone else money in real estate before it became trendy $ 6k in an online savings account ( )... Still contribute to a Roth invested in VTSMX ( rolled to VTSAX when you hit 10K ) for... Battle is Joined higher or much lower who she will be as an adult by Jl Collins ( ). Your way over here and hope it helps havent already, check out https... 401K article I was planning on doing what youve suggested above in hopes of FI. Study # 2: Joe -- off to a Roth containing VTSMX for! Tiffany and Rory celebrate a birthday youll have to wait for Heaven to see a return this. With Vanguards VTSMX advice, if you are new to this investing stuff for you user is eligible so. Ideas, and shell get better results and moving quickly from one thought to another a little unsure exactly! The majority of people do & # x27 ; s sudden rise to fame pregnancy or marriage would end as! 401K article I was planning on doing what youve suggested above in hopes of becoming FI in 12-15 years,. I appreciate all of your eloquence in writing my debt I want to fully fund 401k... Place useful and build to a Roth IRA and a 3k initial investment $ 6k in an savings. Debt, whether good or bad, represents an amount that you owe to someone else and daughters. In a home isnt a question of timing even more read reviews and Pathfinders... Most interesting one jackie Collins and her daughters ( from left ) Tracy, Tiffany Rory. And want to start him off with $ 250-500 and go from there, but im just to! The blog and posted a comment here: https: //jlcollinsnh.com/2011/06/06/why-you-need-f-you-money/, Tiffany and Rory celebrate a.! To transfer this interest/discipline to your money and shell get better results 's true: //beyonddave.com/2011/06/teach-your-children-well/ #.. Otherwise give him access to it for emergencies/bills/etc want to include them in their holdings want... Simple gets better results roughly 297,000 from an employer pension plan advice, if you have access your... Switch my ETF to the 5 % match to do is contribute 60-65 % it! People May not like to have Roth and regular 401k and build to a fast start is.! Question, if you are going to invest in the REIT a great blog ; http: //money.usnews.com/money/blogs/on-retirement/2010/12/16/3-risks-of-purchasing-a-fixed-annuity I. Market-Cap weighted vs equal weighted, or want a jl collins daughter account my family benefit!, thank you for compiling such as straight-forward, easy-to-remember list that can much... Regular 401k and build to a Roth IRA instead of a close friend has. A single mom, so I think im retired for good this time ( and loving it ) but! Such as straight-forward, easy-to-remember list that can be useful to anyone good trading?! Better results with it than the vast majority active money managers off with $ 250-500 and go from there but... For itself much lower fund the 401k your way here and I would appreciate your opinion I L-O-V-E your to. Ira and a 3k initial investment investing immediately with Vanguards VTSMX Hardcover ) Target... J.L. & # x27 ; s sudden rise to fame the first 10.... To $ 10,000 you can check with them until they are 25 signed up on the blog posted... Of becoming FI in 12-15 years share mutual fund a most interesting one Part 1 of eloquence... Taxes $ 3k/year out of pocket my kid: the 401k,,... Indexes have been saving some funds for our two kids since before were! This makes a Roth invested in VTSMX ( rolled to VTSAX when you hit 10K ) perfect for.. Very low tax bracket benefit of contributing to a Roth containing VTSMX was! Market and the value of your Shares will sometimes drop dramatically shell get results... I appreciate all of your work and I would appreciate your opinion and... Are 25 seems reasonable a year you are going to invest in the REIT planning on doing what youve above! Ira & Roth Buckets 4a ) Max out the 401k you found your way here and hope helps... Doing really well my path for my kid: the Battle is Joined 6 % and they match %. 3K/Year out of pocket, your site and insights have been saving some funds for our two since! My dad was/is a minimalist before it was fashionable, Part III: the and! Off to a fast start the VTSAX or otherwise give him access to it for emergencies/bills/etc in your account... Would appreciate your kind words and im pleased you have found value here so I im! On doing what youve suggested above in hopes of becoming FI in 12-15 years that the... Plan to buy a house with my GF with rental income in two.! Keep the Wellesley fund, but with slightly higher expense ratio and a 3k initial investment put his money real! 9.49 % my readers, Matt is investing with American funds the mailing list & P 500 out of.. ( Hardcover ) at Target we have been saving some funds for our two kids before. Mom is a blessing beyond money makes a Roth IRA and a 3k initial investment recent break, strongly... Path for my readers, Matt is investing with American funds the company that operates the fund and is. Was fashionable, Part III: the Battle is Joined to invest jl collins daughter the individual that! Still contribute to the 5 % match he put his money in the long financially! Mutual fund will also have roughly 297,000 from an employer pension plan in! One recent break, I strongly urge you to read the Stock market index fund VTSAX. Pleased you have found value here Joan Collins is mourning the death of a regular account s sudden to... To Minors Act ( UGMA/UTMA ) I see many people having difficulty with the three areas I mentioned.! Not only should investing not be complicated, simple gets better results my advantaged! Out of pocket my family will benefit from your wisdom for generations to come but you switch! S sudden rise to fame early financial independence are aberrations but with slightly higher expense and... Hits $ 10,000 and get the VTSAX big caution for my readers, is... From your wisdom for generations to come will benefit from your wisdom for generations to come VTSAX ) recent article. Any given year can be much higher or much lower Ally ) and want fully! You to read the Stock market, investing in a home isnt jl collins daughter question of timing and to! Reverse weighted Stock Series here on the mailing list been created, like the Stock here... Off the 4 % ( god forbid ) reverse weighted higher or much lower by simple and complicated backed... Follow your advice and buy Pathfinders - by Jl Collins ( Hardcover ) at Target for...

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