/biz/ - Business & Finance

[Anonymous No.4321044]

Beginner investor looking for advice on my initial financial plan. (I have $3000 in the bank and plan on making $10,000 more by the time I start graduate school in Fall 2018)

Initially I plan on taking $1500 out of the Bank and putting that into Vanguard ETFs (VOOG) on Robinhood. I want to treat this as a savings account, always holding. Then also put in 10% of my earning into the ETFs/mutual funds (eventually) and continue doing so for 20-30 years. I also will begin maxing my 401k each year starting 2021.

I'm looking for a sure way to retire as a millionaire.

[Anonymous No.4321138]

>>4321044
silly anon, you can't get rich in vanguard indexes, buy my meme coin pump and dump

seriously though open an account with vanguard so once you have enough money you will get admiral shares with lower ER

this is the first sensible post ive seen on biz in months

[Anonymous No.4321180]

also focus on tax advantaged investment, maximize your 401k (if you get an employer match), then your roth IRA, or if you don't get an employer match, vice versa, but maximize both if you can. if you have a 401k that supports it, look up "mega backdoor roth ira"

[Anonymous No.4321235]

>>4321138
Thanks for the advice anon. You're saying I should save a lump sum and drop into a mutual fund at Vanguard correct? How much money does it usually take to get low ER?

[Anonymous No.4321547]

>>4321235
admiral shares are $10k for most funds. it seems like a small discount but will make a big difference over the years. Vanguard ER is lower than most funds anyways.

Keeping your monthly expenses very low and socking it into indexes is the #1 way to be financially independent. I did not start until my 30s but some friends of mine who started in their early 20s are already retired in their 30s. I feel stupid for those expensive cars I bought in my 20s, thinking my high salary was going to make me rich.

[Anonymous No.4321563]

also, bogleheads forums is a much better place for good financial advice than /biz/

[Anonymous No.4321646]

>>4321235
Vanguard has the lowest ERs in the industry, even if you don't have admiral. Put your 3k in an index fund. I started mine with $3k in highschool, and 4 years of pumping has me at $30k (but I also have a ***cash*** part time job and get free college from my mommy/daddy so grain of salt)

[Anonymous No.4321693]

>>4321235
No. Put your 3k into a large cap fund right now (or total stock market, your choice).
You can convert it to admiral shares once you hit 10k. Paying slightly higher fees is better than letting your money stagnate for months.

[Anonymous No.4321744]

>>4321693
Also use Vanguard's website itself, not robinhood so you can set up a Roth IRA. Prioritize putting money into that.

[Anonymous No.4321828]

>>4321044

>Robinhood
I wouldn't use robinhood as a savings account.
>$1500 out of $3000
I'd consider keeping $3000 in cash always. Just in case. Shit happens.
>VOOG
Why growth? Get VTI/VTSAX/VTSMX instead.
>Then also put in 10% of my earning into the ETFs/mutual funds (eventually)
This is very smart.
>I also will begin maxing my 401k each year starting 2021.
Also very smart.
>I'm looking for a sure way to retire as a millionaire.
You have it down. It's not sexy but it's easy and a low-risk way to become a millionaire. As you earn more, consider upping the 10% to 15%, 20%, 25% etc to get there faster.

[Anonymous No.4321854]

i made 10k out of 900 yesterday trading btc with 100x margin. you just need a little coffee and nerves of steel

[Anonymous No.4321915]

>>4321854
To each there own. Extreme cost efficiency/diversification is just another type of money making strategy.

[Anonymous No.4321929]

>>4321915
*their

[Anonymous No.4321936]

>>4321854
ok? I've made a lot in index funds with no chance of losing it all

[Anonymous No.4321958]

>>4321044
Open a vanguard account, don't use robinhood. You get a variety of benefits this way, but also because robinhood probably won't be around in ten years, and there's no reason to expose yourself to uncertainty. Plus robinhood has slippage and no features

[Anonymous No.4321974]

>>4321854
you are gonna go bust one day and us index fund anons are gonna stay comfy

[Anonymous No.4321981]

>>4321044


>>4321138
Eternal slave speaking.

Why do you protect a "wealth" that is less than $10k by putting it into ETFs when you can try your chance at retiring at 30.

Worst case scenario you lose the $10k, and you will get back this amount by saving during 3 month in your new job.

OP do the right choice in life please. Wealthy people are people that took risk in their 20s. People that didn't want to take any risk in their 20s ended up living a slave life.

[Anonymous No.4322023]

Hate to break it to you kid but your daddy lied to you. At best you will get 2 percent returns over a year in vanguard. Put all of that money into ChainLink and in a years time it will be worth over 100k

[Anonymous No.4322026]

>>4321974
You really clueless I'm sorry to say.
Smart investors in crypto already got back several times their investment back in real dollar in a real bank account.

It's not binary, full crypto or full $$.

Personally I risked $30k, in two month I had my $30k back.

Now I have $400k grown from these original $30k, including $100k in cash.

You may believe me or not, but you know that happens all the time in crypto, and it happened to me.

[Anonymous No.4322064]

>>4321981
>try your chance
why not just go to vegas faggot, lose all your money the old fashioned way

i gamble in crypto too but i'm not counting on it to take care of me when i'm old

[Anonymous No.4322105]

>>4321936
Once you sell the crypto, there is no chance of losing it either, and now I can defend a real wealth in low risk ETF.

$25k dollar is sad m8, at what age will you retire?

Retiring a millionaire at 60 is nothing exceptional, it's what the society gives you in exchange for your adult life as a slave.

Retiring a millionaire at 30 is what you risk when trying to go a little bit off road in your 20s.

If it doesn't work out, you still have your job, and at 30, $25k is easily savable in a few month.

20s money is risk money, not wealth money.

[Anonymous No.4322122]

>>4322064
It's called taking risk dumbass. It's what young people do.

Ask any 50 something what he regrets not doing being young. Most of them will tell you they should have try do this or that to have a better life later.

[Anonymous No.4322147]

>>4321044
>(I have $3000 in the bank and plan on making $10,000
You need 10k savings in case of emergecies. This can be accomplished with 4500 cash savings and 5500 Roth. After 10k of savings you then open an account with vanguard itself. You could do this first by establishing a retirement account with them.
>maxing my 401k each year starting 2021
You only want to put in up to the employer matching. 401ks often have horrendous fees and lack of choice. Since you are starting out, your income isn't going to be high enough to get much of a tax advantage with a 401k. The remainder amount of money would be best put into Roth and then other ETF investments.

[Anonymous No.4322188]

>>4321981
>Wealthy people are people that took risk in their 20s
I agree that the best time to take calculated risks is when you are young, but you need available funds to take opportunities when they arise.

[Anonymous No.4322220]

>>4321044
>buying vanguard before the firesale 2018 crash.
Lol fucking plebs

[Anonymous No.4322224]

>>4321044
What cryptos are you guys in?

Only the posters that posted here ^ i'm curious.

Or at least the meme coins shilled here.

[Anonymous No.4322269]

>>4322224
from most to least i own xbt, eth, bch, xmr
about 2% of my net worth across those 4
so a substantial amount

[Anonymous No.4322316]

>>4322269
It seems you don't make the difference between people who already has a wealth and people who don't.

If you're already wealthy then of course you don't risk everything in crypto.

But saying to a 20 something that has just $3k to put everything in low risk ETF is either evil or incredibly naive.

[Anonymous No.4322349]

>>4322224
pic related

about 50% of my wealth in them

[Anonymous No.4322357]

>>4322316
>that has just $3k to put everything in low risk ETF is either evil or incredibly naive
If that person got injured and couldn't work, or an emergency comes up, that person would be in a world of hurt if their investment is down 30 percent and they have to sell at a loss. I have lived the no money emergency situation. I can testify that it sucks.

[Anonymous No.4322363]

>>4322026
You're not trading on 100x margin are you? He's saying using that much leverage will blow up your account, which is true.

[Anonymous No.4322380]

>>4322316
I advised him to keep his $3k in cash.

[Anonymous No.4322391]

>>4321044
all in XMR

[Anonymous No.4322394]

>>4322363
Oh yes indeed I don't do leverage.

But he seemed to imply that the solution was ETF.

[Anonymous No.4322407]

>>4322380
For the emergency fund ok.

But the next $10k you will not put everything in a low risk investment right?

[Anonymous No.4322433]

>>4322357
Building an emergency fund is good.

But the point earlier was that anything he was earning in the future should be put in ETF.

The right thing to do is to take huge risks once you have a large enough emergency fund.

[Anonymous No.4322494]

>>4321044
1. If you're that young, I would just wait for the next large market crash or pullback.
2. If you only have $3000, it doesn't fucking matter. Just hold on to it lol

[Anonymous No.4322532]

>>4322147
Also, get a high deductible health insurance plan while you are young and get a health savings account. When you get a few thousand saved in your HSA, then move the rest into an HSA investment account.

[Anonymous No.4322605]

>>4321044
If your goal is to retire as a millionaire you can easily doing by working, saving money and putting it into a fund as you plan to do.
The thing is that you can probably do it a lot faster by taking more risks if you spend some time to learn about the markets, including crypto

[Anonymous No.4322667]

>>4321044
you couldn't have picked a worse time to buy the stock market

[Anonymous No.4322715]

>>4321044

Instead of blindly piling money into the US, consider buying the 10 cheapest markets by CAPE and rebalance once a year

http://www.starcapital.de/research/stockmarketvaluation

You could have 50% of your money in a US ETF of your choice, but invest the other 50% overseas

[Anonymous No.4323088]

>>4322494
>If you're that young, I would just wait for the next large market crash or pullback.
I don't remember which paper I read it in but on average you lose out on more money waiting for a crash than you would get by investing into it.

[Anonymous No.4323114]

>>4323088
I think on Bloomberg this week they were saying if you would have invested in overvalued assets this year, you would have made 100 percent return. I think there is some fund or something that does this.

[Anonymous No.4323372]

>>4323088

Shiller PE ratio is 31 now. And it will drop a little once the 2007/8 crisis is no longer included.

It got to 44 in 1999, but the US does look expensive.

[Anonymous No.4323434]

>>4323088
crashes usually wipe 50% off the market, then make it all up within 2-3 years. buy the dip for a much bigger gain than you'd get buying now

[Anonymous No.4323680]

>>4323372
>>4323434
Regardless of which method you use to determine if the market is over priced or now, you have have thousands of scientists and engineers with billions of dollars behind them looking at the same methods and then some.
Trying to beat the market is a zero sum game. If there was an opportunity visible with math you can do on your home computer, someone else has already taken it.
Also a lot of the perception that you've missed out is just hind sight bias. saying you could have made it if you bought on so and so date is just as useful as saying you should have bought those lottery numbers.

[Anonymous No.4323684]

>>4323434
>buy the dip for a much bigger gain than you'd get buying now

He could wait 2 years for the dip and miss 20% upside

What if there's only a 10% correction and the US goes sideways for 5 to 10 years? This would correct the valuation and he would have been better off investing today.

Again, why limit oneself to the USA.

50% Vanguard Total US
12.5% China
12.5% Eastern Europe
12.5% Asia Pacific
12.5% Emerging Markets

[Anonymous No.4323697]

>>4321044

Just start with a target date fund. Then when you have enough, you can make your own 4-fund portfolio.

[Anonymous No.4323730]

>>4323680
>Trying to beat the market is a zero sum game.

Buy markets based on valuation and rebalance, if at all, once a year. A global passive tracker in 1988 would have sucked because Japan was around 50% of global equities and the CAPE was nearly 100.

http://mebfaber.com/wp-content/uploads/2016/05/SSRN-id2129474.pdf

[Anonymous No.4323878]

>>4323730
Your quoting me but I think were agreeing? I just don't think tagging the market as over priced is useful because if you think so, others do too, bringing the price down.

[Anonymous No.4324801]

>>4323680
dude the market is gonna crash fucking hard in the next 2 years for sure. its long over due, china is fucking with currency and is sitting on a bubble. add that to the corporate raiding that is going on right now in the united states government and we'll be in for a long dip. shits gonna last. that is when you buy into the stockmarket with vanguard funds. get total us stock market index and an emerging global market index and you will fucking kill it.

so put your money into crypto in the meantime. i suggest monero as that shit is only going up