Dumb question I know, but I’d like some feedback. I (37/m) am obviously not getting any younger amd would rather not have to work til I’m 90. I have approx two years worth of salary saved up and 2 small loans equaling $500 a month. I have money in my work 401K but thats it. House is paid for so no mortgage payments the and some small mutal funds. Both loans could be paid off if need be. I know I should have done this sooner but here I am. Suggestions on what I should be doing.
Added info. Intrest rates on loans are 3 ish %. I am putting in 5% in my 401k. Work will match up to 3% but in my 17 years I’ve never seen it matched that high.
12 comments
I can’t think of a worse place to ask this question than reddit
You’re doing better than 60% of the people out there – get a Roth IRA and keep your non problems to yourself
There is a sub called r/personalfinance
My best suggestion for now, if you are in the US would be I-bonds. (‘I” like “inflation”)
However, I may be an idiot.
This question is probably better suited to r/stockmarket, but honestly man right now is not a good time to invest. The market has been taking a huge hit.
pay off all loans. Have a car paid off in addition to the house. Maybe another smaller rental property and/or ag land. Some precious metals but not too crazy. Otherwise it’s the market
If you make well timed investments you’ll do good (quarterly rotations not day trading). Can’t share investment strategy though and I haven’t found any reliable source I’d trust. So that kind of sucks. Probably the most important thing to learn is market psychology (whether you’re in the stock market or housing market), followed by technical analysis, then macroeconomic trends (only 0.1% of people will be good at all three, and rest will be wash out of the market)
If you want to talk more DM me
Diversify.
Property is generally a solid investment.
I invest in stocks, gold, fiat currencies. Most of my investment is in crypto but that shit is wild and as a beginner, I’d strongly recommend crypto as a smaller part of any investment fund, not the majority.
Also, Dollar cost average. If you choose to invest in such things, don’t put all your money in at once, especially in a bear market, ladder your way in if we continue to dip.
Start small and invest more as you learn. But this option will take effort on learning for the best results.
You could also always have a professional do it for you.
Get a divorce and develop a coke habit!
Sounds like ur doing pretty good. Max out your 401k or at least max out what your employer will match. a mutual fund that has a good track record. Pay off loans and remain debt free. If ur investing in your 401k and got a couple of mutual funds you’ll have a good retirement.
Maybe consider getting into real estate and have a rental property if that’s something you’re interested in.
What is the interest rate on the loans? I’d just pay them off first.
Is your 401k contribution maxed out?
But having that much cash in the bank is a huge loss with inflation the way it is. You absolutely need to put it somewhere else ASAP. Talk to a financial advisor.
Investing in your future is just like planting a tree. The best time to do it/start was a long, long time ago. The second best time is today.
Even though the market is taking a hit, there are still solid stocks to buy, or you can buy mutual funds, which typically only pay out once a year but they pay towards the end of the year.
You don’t necessarily need to hire/pay a fund advisor, if you’re relatively intelligent you can find information on mutual funds on your own, and sites like Fidelity, TD Ameritrade, etc., allow you to set up a free account and buy stocks and/or mutual funds through them.
If you’ve bought mutual funds or blue chip stocks, the intermittent ups & downs of the market are irrelevant because you’re in it for the long haul. To remove a lot of the micromanaging set up your account with a reinvestment plan (both Fidelity and TD offer this) so any dividends you earn are automatically reinvested into that fund or stock.
As time goes on, consider buying more mutual funds or more stocks to help accelerate the growth. Or just leave it to do its thing, and check in on it from time to time, just to help remind yourself what it’s in store for your future.
I dabble, but I’m not going to tell you what mutual funds or shares to buy because I’m not a financial advisor and you’re not my client. Do your research yourself, pick some that you like and which seem solid, and don’t worry if you have red days, red weeks, etc. Again you’re in it for the long haul, and if you were smart about your investments you bought shares in solid, reputable companies, so even if you’re having a red today it will be a green day “tomorrow”.
Understanding your 401(k) is the first part. Most provide a 50% match on 6% of your income. For some this doesn’t kick with the first 1%. So you would have to put 7% of your income for the full match. Any more you put in won’t be matched. This is important. That match is free money. Be sure to get the full match.
IRA accounts outside your 401(k) is the next step. 401(k) plans don’t always have the best mutual funds since they are catering to a market with limited options. An IRA will give you better mutual fund options than your 401(k).
The downside of IRAs is the cap on contributions at $6k. If you want to invest more you can put more into the 401(k) or have a taxable investment account and use tax advantaged mutual funds in that account. Municipal bond funds are good for that.
If you have maxed out the match on your 401(k) and want to save more, consider a CFP. They know the ups and downs of different savings strategies and can help find what is right for you.
This assumes you don’t want to be an active trader. Just want retirement savings you let ride.
Hire a financial planner. One that costs money out the gate. The ones offering free services are only trying to sell you something.
Give them a complete picture of your financial situation and they should be able to help you out.