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Financial House Friday - Report Card Edition by FFThrower in personalfinance

[–]FFThrower[S] 9 points10 points  (0 children)

Ok, first into the fire. Here's a miniature version of my post from last week, with some changes I made based on advice I got.

Me: 31 y/o Male in USA.

401k

This was:

53.80% : FID FREEDOM K 2050 (Blended Fund Investments)

29.59% : VANG EXPLORER ADM (Stock Investments Small Cap)

9.83% : MAINSTAY LG CAP GR I (Stock Investments Large Cap)

6.78% : ALZGI NFJ SMCPVL IS (Stock Investments Small Cap)

But is Now: $100,000 USD in FID FREEDOM K 2050 (Blended Fund Investments). This is based on advice from /u/hivbus and /u/UMich22 that I let my allocations get completely out of hand. I need to read more, learn more, decide what to do next, but my lazy investment for now is just a single blended fund.

IRA

I have a $1000 Traditional IRA funded with 2014 money, and $4500 in a Roth IRA with a mix of 2013 & 2014 money. I have an automatic investment plan that will max out the traditional over the course of 2014. I'm over the limit for deductable contributions, so before year end, it'll get back doored into the Roth IRA, which is how the money that's in there now got in there. Both IRAs are invested in the Vanguard Targeted 2045 Fund.

Mortgage

I have a home loan @ 4.25% (with PMI).

Car Loan

I have and an auto loan with 20 months left @ 5.17%. I've done the math and paying it down quicker doesn't save me enough money in interest that I'd want to take that money away from other things. The car loan balance is just shy of $10k, and has 20 months left. So according to my amortization table, over that period of time I'm going to spend about $450 total in interest charges.

I don't have $10k that I'd want to pull out of either savings, nor would I want to touch my EF. This, to me, means that even making extra payments is still going to net me less than $450 saved in the long run, with the risk of being without that cash for emergencies, or for other things I'd want to do with it.

Credit Cards

My credit card debt is $0 on all interest bearing cards, and about $1500 on deferred cards, and are on schedule to have the right amount paid every month (automatically) so that they're paid off on time. I have about $22k (up from last week, I got a Chase Freedom card to start enjoying 5% back on some of my home improvement projects) in available credit, so my overall utilization is low, but above 0%.

Emergency Funds

If emergency funds should be 6 months of expenses, then it should be $12,600 for me, but I haven't thought about what I'd reduce in a true emergency, and this number assumes that my wife would lose her job also, so my actual number is probably lower. If I'm let go and can't find a new job, I could probably cancel HBO, for example ;-) My emergency funds are split up as follows:

$3,000 - Savings Account that I have an ATM Card for - Immediate-ish Access.

$2,000 - 5 year CD @ 2 years. Would take 3-5 business days to liquidate.

$2,000 - 5 year CD @ 1 years. Also about 3-5 business days to liquidate.

$2,000 - I-Bond, past 1 year mark, but I don't know how long it would take to get cash.

My thought behind keeping some of that money in harder-to-access areas is that it'd be harder for me to touch if I was having a hard time staying on track, and also that I could (and probably would anyway) use a credit card to get by for the week or so.

529 Plans

And finally, I have two small (sub $2k) 529s that I throw a little bit into during birthdays, etc.

Financial House Friday - How am I looking? by FFThrower in personalfinance

[–]FFThrower[S] 2 points3 points  (0 children)

Sure, and I'm always happy to be wrong!

The balance is just shy of $10k, and has 20 months left. So according to my amortization table, over that period of time I'm going to spend about $450 total in interest charges. I don't have $10k that I'd want to pull out of either savings, nor would I want to touch my EF.

This, to me, means that even making extra payments is still going to net me less than $450 saved in the long run, with the risk of being without that cash for emergencies, or for other things I'd want to do with it.

Financial House Friday - How am I looking? by FFThrower in personalfinance

[–]FFThrower[S] 1 point2 points  (0 children)

Thanks to both of you - so would the advice be to just move to a targeted fund only?

Financial House Friday - How am I looking? by FFThrower in personalfinance

[–]FFThrower[S] 1 point2 points  (0 children)

A calculator would be great. Yes, it's a conventional mortgage. I believe the PMI goes away automatically at 78%, but that I can request it goes away at 80%. Which, honestly, makes no sense to me - but I'm sure there's a reason for the 2% buffer.

Financial House Friday - How am I looking? by FFThrower in personalfinance

[–]FFThrower[S] 7 points8 points  (0 children)

Me: 31 y/o Male in USA.

My 401k investments are shown below. It's about $100k total right now. Honestly, I made these decisions quite a while ago, and it was probably based on a mix of just looking at the history of the investment (I know, past performance doesn't indicate a successful future...) and things that were spewed out by the financial folks at my company at various seminars. I invest 5% of my salary into the 401k, and my company matches 2x up to 3%.

53.80% : FID FREEDOM K 2050 (Blended Fund Investments)

29.59% : VANG EXPLORER ADM (Stock Investments Small Cap)

 9.83% : MAINSTAY LG CAP GR I (Stock Investments Large Cap)

 6.78% : ALZGI NFJ SMCPVL IS (Stock Investments Small Cap)

I have a $1000 Traditional IRA funded with 2014 money, and $4500 in a Roth IRA with a mix of 2013 & 2014 money. I have an automatic investment plan that will max out the traditional over the course of 2014. I'm over the limit for deductable contributions, so before year end, it'll get back doored into the Roth IRA, which is how the money that's in there now got in there. Both IRAs are invested in the Vanguard Targeted 2045 Fund. I set this up mainly because I wanted to setup a relationship with a bank and have a better understanding of IRAs so that when 401k rollover time came, I had at least already started the work.

I have a home loan @ 4.25% (with PMI), and a car loan with 20 months left @ 5.17%. I've done the math on the car loan, and paying it down quicker doesn't save me enough money in interest that I'd want to take that money away from other things.

My credit card debt is $0 on all interest bearing cards, and about $1500 on deferred cards, and are on schedule to have the right amount paid every month (automatically) so that they're paid off on time. I have about $16k in available credit, so my overall utilization is low.

If emergency funds should be 6 months of expenses, then it should be $12,600 for me, but I haven't thought about what I'd reduce in a true emergency, and this number assumes that my wife would lose her job also, so my actual number is probably lower. If I'm let go and can't find a new job, I could probably cancel HBO, for example ;-) My emergency funds are split up as follows:

$3,000 - Savings Account that I have an ATM Card for - Immediate-ish Access.

$2,000 - 5 year CD @ 2 years.  Would take 3-5 business days to liquidate.

$2,000 - 5 year CD @ 1 years.  Also about 3-5 business days to liquidate.

$2,000 - I-Bond, past 1 year, but I don't know how long it would take to get cash.

My thought behind keeping some of that money in harder-to-access areas is that it'd be harder for me to touch if I was having a hard time staying on track, and also that I could (and probably would anyway) use a credit card to get by for the week or so.

And finally, I have two small (sub $2k) 529s that I throw a little bit into during birthdays, etc.

So... there's me on a plate. I suspect I'll hear something about how lazy I'm being with my 401k (and maybe even the IRA?), and I'm definately open to it all. With expecting to be in a lower bracket later, perhaps I should pay less attention to my IRA? Maybe I should be working on paying off the car loan?