New To Investing Thread

[ben ji]

If you're talking about a Roth IRA, Vanguard is as good an option as any, but any retirement account is going to have some penalty if you withdraw from it early.

And otherwise I think you generally have the right idea, but it's probably better to diversify among several ETFs even though they tend to be pretty diverse already.

Also, your horizon of when you plan to withdraw should probably determine which ETFs to invest in. Should not be too difficult to do some online research.

You can withdraw your ROTH contributions at any time with no penalties. Not a good idea but there is no penalty (You cannot withdraw the earnings until 59.5 or something)

[Emo EMAW]

Why is it not a good idea?

[michigancat]

Is vanguard pretty much the way to go as far as setting up roths? My fiancé and I recently have come across a pretty large sum of money and I'm looking to invest it but I have never actually invested in anything other than my company's 401k plan. After a Roth is set up and maxed is my line of thought to just pour everything else into an index fund dumb? I'm looking for something safe and that I can withdraw from a couple years down the road without penalties

That's probably pretty smart. After maxing the Roth you should consider maxing out your 401k depending on your income/student loan situation. If you're already maxing out your 401k take a nice vacation or something.

[ben ji]

Why is it not a good idea?

Because you can never replace the contributions you withdrew.

[ben ji]

Is vanguard pretty much the way to go as far as setting up roths? My fiancé and I recently have come across a pretty large sum of money and I'm looking to invest it but I have never actually invested in anything other than my company's 401k plan. After a Roth is set up and maxed is my line of thought to just pour everything else into an index fund dumb? I'm looking for something safe and that I can withdraw from a couple years down the road without penalties

That's probably pretty smart. After maxing the Roth you should consider maxing out your 401k depending on your income/student loan situation. If you're already maxing out your 401k take a nice vacation or something.

This. Before investing the money in a non tax advantaged account make sure you have used all your tax advantaged space (401k,IRA, HSA). Spend the cash on living expenses if you need to while you max out these accounts.

I would not invest any money that you plan on spending in the next 5 years (House down payment for example).

[catastrophe]

Part of the strategy depends on current finances and tax situation. If you are planning/able to invest money and not touch it for the next 20+ years you should absolutely do it as long as you are not neglecting something stupid like credit card debt.

[blu]

Is vanguard pretty much the way to go as far as setting up roths? My fiancé and I recently have come across a pretty large sum of money and I'm looking to invest it but I have never actually invested in anything other than my company's 401k plan. After a Roth is set up and maxed is my line of thought to just pour everything else into an index fund dumb? I'm looking for something safe and that I can withdraw from a couple years down the road without penalties

That's probably pretty smart. After maxing the Roth you should consider maxing out your 401k depending on your income/student loan situation. If you're already maxing out your 401k take a nice vacation or something.

This. Before investing the money in a non tax advantaged account make sure you have used all your tax advantaged space (401k,IRA, HSA). Spend the cash on living expenses if you need to while you max out these accounts.

I would not invest any money that you plan on spending in the next 5 years (House down payment for example).

Right maybe I didn't explain well enough. I am matching the company contribution on my 401k, plan on paying student loans and maxing contribution to Roth IRA. I was intending to use the index fund or possibly a cd to safely store money for a home down payment in a couple years. I though just leaving it in a bank account would make me miss out on some return that I could potentially gain otherwise

[sys]

pretty much any discount brokerage is the same as pretty much any other.  vanguard is adequate.  if you only plan to invest in vanguard funds, it's arguably the best.

you can't put a large sum of money in a roth, so i'm not entirely sure i understand the connection (but like ben ji was saying, it's good to have a roth).

[sys]

if you only plan to invest in vanguard funds, it's arguably the best.

actually, i'm not sure of that.  but it doesn't matter much. 

[blu]

Is vanguard pretty much the way to go as far as setting up roths? My fiancé and I recently have come across a pretty large sum of money

Sorry for your loss

Thanks but unnecessary 

[blu]

pretty much any discount brokerage is the same as pretty much any other.  vanguard is adequate.  if you only plan to invest in vanguard funds, it's arguably the best.

you can't put a large sum of money in a roth, so i'm not entirely sure i understand the connection (but like ben ji was saying, it's good to have a roth).

As in since we will no longer be paying student loans we will be contributing the maximum allowed each month to the Roth. Sorry I'm typing this while working

[ben ji]

Is vanguard pretty much the way to go as far as setting up roths? My fiancé and I recently have come across a pretty large sum of money and I'm looking to invest it but I have never actually invested in anything other than my company's 401k plan. After a Roth is set up and maxed is my line of thought to just pour everything else into an index fund dumb? I'm looking for something safe and that I can withdraw from a couple years down the road without penalties

That's probably pretty smart. After maxing the Roth you should consider maxing out your 401k depending on your income/student loan situation. If you're already maxing out your 401k take a nice vacation or something.

This. Before investing the money in a non tax advantaged account make sure you have used all your tax advantaged space (401k,IRA, HSA). Spend the cash on living expenses if you need to while you max out these accounts.

I would not invest any money that you plan on spending in the next 5 years (House down payment for example).

Right maybe I didn't explain well enough. I am matching the company contribution on my 401k, plan on paying student loans and maxing contribution to Roth IRA. I was intending to use the index fund or possibly a cd to safely store money for a home down payment in a couple years. I though just leaving it in a bank account would make me miss out on some return that I could potentially gain otherwise

just leaving it in a bank account would make me miss out on some return that I could potentially gain otherwise
Markets can go down too. If you plan on spending the money in the next couple of years I would not invest it in the stock market unless you are willing to sell it for a loss when the time comes.

Without knowing anything other than what you posted here I would use the money in this order.

1. Payoff student loans
2. Put 5,500 in Roth
3. Set aside an amount you want to use as a down payment in a couple of years.

If you have anything left over after you do those 3 things go on a vacation and then live off the rest of it while you maximize your tax advantaged accounts.

[ben ji]

My Roth and regular IRA are through Fidelity. Website is easy to use and they have the same low cost funds as vanguard.

Another plus is they have actual physical locations which I have used exactly once when I rolled over an old 401k into my IRA. The old 401k mailed the check to me made out to Fidelity, instead of having to mail it to fidelity I just walked into the office and they deposited it.

[blu]

My Roth and regular IRA are through Fidelity. Website is easy to use and they have the same low cost funds as vanguard.

Another plus is they have actual physical locations which I have used exactly once when I rolled over an old 401k into my IRA. The old 401k mailed the check to me made out to Fidelity, instead of having to mail it to fidelity I just walked into the office and they deposited it.

My 401k is already through fidelity. Thanks I will look into that

[catastrophe]

You can chose funds that are a more bond-heavy to mitigate some market risk.  If you are in a low risk investment I think the odds of the the value going down over the course of 2-3 years is pretty low.  Heck, even if you have to pull it out in year 3 for a minor loss, that loss is tax deductible so it's not that bad.

On the other hand if you shelve it there is a 100% chance that the money will lose value by virtue of inflation alone.

If it really is a big sum of money, I say let it grow.  But basically you are betting on whether there will be a market crash / recession in the next couple years.  Even then, unless you think you would need that money either to survive or to buy a house at an optimal time (assuming job prospects make sense to take on that kind of debt) you can just ride it out.

[sys]

bonds can go and down too.

there's a lot of stuff i would still do in the current environment with money and a two year horizon, but you sound pretty risk adverse.  the domestic market is pretty scary right now, i'd be careful.

[hatingfrancisco]

Have you guys ever checked this out?

https://www.loyal3.com/

I just invested 10 bucks into WWE.

[treysolid]

if you have a bolus of money that you want to remain liquid, get a sallie mae/discover bank/insert other financial institution here money market account. This is where I keep my emergency fund (10K) plus whatever else I'm saving up for (car, new hardwood floors, etc.). CDs are fine but you can't pull the money out at a moments notice.

[Emo EMAW]

Why is it not a good idea?

Because you can never replace the contributions you withdrew.

So?  Sometimes there is a better place for your money.

[ben ji]

Why is it not a good idea?

Because you can never replace the contributions you withdrew.

So?  Sometimes there is a better place for your money.

If you know of something better than having your money grow tax free and be withdrawn tax free go for it I guess.

[catastrophe]

Why is it not a good idea?

Because you can never replace the contributions you withdrew.

So?  Sometimes there is a better place for your money.

If you know of something better than having your money grow tax free and be withdrawn tax free go for it I guess.

And if you are truly savy enough to wisely make those kinds of investment decisions, you should have enough spare money sitting around to make the $5.5k yearly contribution anyway.

Just look at any chart explaining compounding interest.  You gotta let that snowball keep rolling.

[wetwillie]

Anyone else get in on this Snapchat IPO?

[The Big Train]

Holy crap guys Ethereum is up $26 since last week which is a 136% increase. It's also up by $33 since last month which is a 275% increase.

[Kat Kid]

Why is it not a good idea?

Because you can never replace the contributions you withdrew.

So?  Sometimes there is a better place for your money.

If you know of something better than having your money grow tax free and be withdrawn tax free go for it I guess.

hunting trip

[chum1]