Guide Use Your IRA to Buy Property in Mexico (Wise Investments Book 1)

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Sort order. Luisa Villegas Sakha marked it as to-read Jul 11, There are no discussion topics on this book yet. About Thomas Phelan. I am not clear on what a good gauge for how much cash to keep on hand would be though and do not want too many lazy employees on hand. At current spending rates I have approximately 18 months worth. Is this too much?

So my first comment is pat yourself on the back for a job well done and have confidence in your ability to sift thru this stuff. I only wish when I was 30 you were around to show me the ropes! But really it will be only the finest of fine tuning. It also depends on your expenses. But they do tend to smooth out the ride over time. You are right, what you are doing is very close to what I would have suggested. I curious. Thanks for the very specific feedback and response. Honestly some of the salaries presented here intimidate me and some seem light years ahead in terms of earning potential, but it is not hopeless.

It was still very high before that as well. Six months of essential non-discretionary costs is particularly helpful and helps me nail down something decisive on the cash front. I am not so much unsure as simply very open to the the feedback of others especially those who have lived longer and experienced more. As far as knowing exactly what to do, not quite. I have gathered bits and pieces here and there over time from reading and had some low impact educational experiences provided during efforts to time the market and pick individual stocks ect.

This timing the market effort has been the hardest to eradicate, and inaction with lump sums of cash has been costly to me. It really takes training your mind to think properly about all of the relevant factors. I am one who loves simplicity in its many magnificent forms, so naturally this rings true with me. For example it was immediately obvious long ago to me that consolidating accounts under as few roofs as possible is the only logical action before I ever read anything about it.

Needless to say then the idea of owning multiple, large cars with extra seats, houses too large, too many clothes, shoes, toys…these things are real problems in my mind. I have made some shaky choices along the way, but these even tend to be moderate by societal standards. I have moved my entire apartment with this hatchback, and even RV in the high alpine at times as it sleeps a full 6 foot person in the back comfortably.

I am not paying anymore than the amount I aggressively negotiated and paid in full. It is hard to fully explain the excitement its incredible handling and impressive torque has brought as I carve winding interstate and mountain roads through the inter mountain west — all while averaging over 30mpg highway. Pure bliss!

Perhaps I would have chosen the almost 50mpg diesel TDI version today, but such is life. Maybe not, who knows. Live, Learn and Grow! I seek balance as I will only live this life one time.

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At any rate, thanks for your feedback and discussion on the specific funds. I have been targeting high impact funds with the lowest fees for a while and appreciate your candid information regarding what has worked and what has not for you. I wanted to finally add that I read your post on MMM and really appreciated your spirit and tone.

It is amazing how if I was to give a speech on the subject, it would be exactly like yours. We are a rare breed. It is really about enjoying the journey, a journey filled with gratitude as well as options. Getting to FI is every bit as much about controlling needs as it is having assets.

A big perk to the TSP plan is the.

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To me the C-Fund looks just like an index fund, but the targeted F-Funds also seems to be an intriguing option, as they adjust for acceptable risk over time. After reading your recent k column, a TSP seems to have the benefits of an employer-sponsored plan and more choice of traditional or Roth, tax-free Roth contributions when deployed! This seems to be a no-brainer to me right? But please understand I have no experience with or expertise in the nuances of Canadian investing.

So my comment will have to be pretty general. First, at age 23 you are off to a fantastic start with your income, low expenses, zero debt and money already in place. My biggest concern is that you are very heavily invested in Canadian stocks and bonds. The problem is, Canada is a very small economy on the world stage. VTSAX being my favorite example. Especially with interest rates at all time lows. Assuming, of course, you can handle the wild ride that comes with them. I found you through the Mr. Money Mustache blog. Just, from that point on send all income from work or other sources to savings.

How do the mechanics of this work? Month 1 of retirement: I have 1. Month X of retirement stocks have been taking a bit of a hit: I have 1. So my question is why did you move to NH? We moved here in when I was recruited for a job in Nashua. Would that be a problem? I believe we can make that work! But that has nothing to do with NH and everything to do with my restlessness.

Other than having no income tax is a wonderful boost to building your stash. And with everything to do around here, being FI and having the time is very sweet! This is the worst summer I remember since moving here in Hot, wet and humid. Hopefully when I return in September a beautiful fall will be waiting.

I have very little relationship experience and would dearly love to get out and above and date women to both have fun and learn from the experiences. So how do I reconcile my goals of being an Irish Lothario and reaching Financial Independence on a modest by Irish standards salary. Only faded memories. All I can say is that I envy you having found your partner so long ago!

It is just that many, if not most, of those dimes were spent on buying my freedom thru investments rather than fancy cars, houses and the like. Keep it simple. Focus on your pre-tax income and save as large a portion of it as you can, remembering that you are spending this money on investments to buy your personal freedom.

Hi, I agree with Jim. The simpler, the better. That is what I would probably do. Good luck. Hi Jim; I am really enjoying your blog. I was wondering, would you be interested to help me with my road map for building my future! I am very new at investing and started some Vanguard accounts. But am pretty scared about doing oo many mistakes. If you could be so kind and mentor me I would deeply appreciate it.

If you are interested, please let me know, so I can write my financial break down for you. Thank you in advance for your attention in this matter. Sincerely Paris Parsa. The whole point of this blog is to share what has worked for me and what has bitten me in the ass. It is what I do and the advice I give my daughter. When I can get her to listen. Thank you for your kind response.

The problem is, due to my depression problem, my mind is not as sharp as it used to be and i have a hard time focusing and retaining information. I get lost somewhere in the middle every time I start. I would deeply appreciate your input since I trust your judgment. It is going to be a long one. So, here it goes. Few months back, the retirement scare came to me and i started searching all our options.

Luckily, that is when i found our blog too. My husband is 46 and I am Both dentist. We had a bad Bankruptcy two years ago and closed our dental offices. Short sale our home. Lost everything. I am staying home with our little ones and my husband works as an associate. I am frugal and he is a big spender. I separated our finances few month ago and it is much better.

Based on my calculations, i came up with this system and he agreed. His income get divided this way. We owe IRS. He is pretty bad with keeping up with this one since his jobs were very shaky lately. We share the bills and children expenses. This helped my to have a lot more control over our finances. I saved a ton from my share and he is always low in money.

But he said it was a wake up call and helped him to reevaluate his spending habits. Now as far as retirement goes. So I still need to figure that out with our accountant. His income is significantly lower this year. Now, at our age, I am trying to figure out, what is the best way to invest. Most of my investments are taxed and are not in an IRA. I was reading about the tax harvesting and made me think deep about what needs to be done.

Should I wait and leave it alone. Will the loss help our taxes? How about the gain from the Health index? What should I do to reduce the tax responsibility. We are in a high tax bracket. Have very little in our retirement plan and not in our twenties any more. We started very late due to tons of schooling, immigration, more schooling , opening our dental office, tons of loans to repay and finally our big fall at and bankruptcy. The fear of future is making me very uncomfortable.

Roth IRA rules and requirements

Our second kid 6 years old has none. I would deeply appreciate any advise. You are awesome. Cheers Paris. It is an issue for me from time to time as well. No fun. But they are in the past now and at 46 and 41 you are plenty young enough to build your fortune and as dentists you have strong earning potential. Once you get the IRS paid off simply shift that money to your investments. Your wealth will explode! Key here is to keep your husband on the path.

While you have the time to rebuild there is simply no room for big spending until you are FI. He needs to pull up his big-boy pants and understand this. It could just as easily reverse tommorrow. These are sector funds and too narrowly focused for your needs. But you should get this to Vanguard as well. Focus on building your wealth first. In the next few days I should have a post up recommending these guys. Not quite as cheap as DIY with Vanguard, they do provide an exceedingly simple way to invest in a portfolio of index funds. Rather than choosing the funds yourself, you open an account and tell them your goals.

The software then suggests the asset allocations to reach those goals. Thank you so much for your advices. All of them sound great and I will start implementing them. Will let you know how I am doing. I also have an HSA account that is used for my huge medical bills for uncovered Antidepressants and dr. Appointments hundreds of dollars per month But I am trying to use it to the max.

HSA allows me to invest in Admiral funds without a minimum investment. It is awesome. I tried to move our traditional IRAs to Vanguard once online and it opened an Brokers account for me. I will do that ASAP. Sorry to ask so many questions. I truly appreciate your time and care you placed in answering my questions and sooooo fast. I would sell all the Health fund. Great content there, and boy was my timing lucky! I was days away from fully funding a self-employed k program for the business my wife and I run alongside my day job with Fidelity only to have my eyes opened to the huge disparity in fee structures.

And question 2 requires no rambling backstory: To what extent does the amount withdrawn in post-FI living vary according to the value of your investments? If you are going to continue to operate the business and it can reliably throw off 20k per year, then you need 15k more for your target spending of 35k per year. Semantics, I say. What matters more is how you feel about the business and how much of your energy it takes to create that 20k.

Made for a great academic study and it is heartening that in all but a couple of cases the portfolios survived just fine for 30 years. In fact most of the time they grew enormously even with the withdrawals. All that said, I think that it is nuts to just set this up and let it run regardless of what happens in the real world. The market is climbing and that provides a strong wind at my back to support this.

I was reading through your stock series and really enjoyed it, but I have one question. I noticed that you recommend keeping stocks in a taxable account and bonds and REIT in a non-taxable account, which seems prudent, but how do you do asset reallocation? Let me know if you need any clarification. Although we have always saved, wish we had known some of this stuff earlier in life so we could have retired years earlier.

Anyway, we feel like we have more than enough money saved to live off the rest of our lives. In fact, we have enough income right now between SS and pensions that we have not touched our investments. However, what about Long Term Care? Is that something we should look into? I have been following MMM the last couple of months and have spent the last couple days reading many of your posts.

We now know what were are going to do, and now will not have to pick which financial advisor we feel has the best advice. We are also working on changing our will now that our children are grown. Trying to decide if we need a will or trust. Any thoughts on LTC, will, trusts? Great question, but a bit out of my pay grade. But here are my thoughts…. These are very smart folks and they have very sophisticated analytical tools that allow them to predict with almost absolute certainly how frequently any specific bad thing is likely to occur within any specific group.

Personally, I carry as little insurance as possible. So no LTC for me. But this is me. I have a very high tolerance for risk and a willingness and ability to be very flexible with our lifestyle should bad stuff happen. This is a very personal decision that has as much to do with your personal profile and attitudes as it does with any financial analysis. As for wills and trusts, again a question outside my scope.

This is very dependent on the laws in the state or country where you live, your net worth and your intentions. But if we all three die, say during one of our travel adventures together, our will specifies what happens then. It also makes for a much smoother transition. On Sept. I have also been talking to my son also about investing, and we were wondering what your suggestions are for college savings.

I notice that a lot of the Vangaurd funds require bigger investments. Also would he set up one of these college accounts or just put the money in his name. Being able to live on your SS and pensions while letting your investments run is a very cool thing. College savings is a very tricky thing. The tools offered keep changing as does the effect such savings will have on the chances for future aid.

My suggestion would be to look closely at the tax-advantaged options, and their restrictions and rules. Costs, too. Funding his tax-advantaged accounts should come first. You are correct that Vanguard typically requires around 3k for most funds, and this includes their plans. The easiest thing would be to build the money to that level and then open the accounts.

Jim, Thanks so much for answering my questions even though you implied they were out of your pay grade. We keep thinking we might need LTC insurance, but for some reason could never get around to buying it. Your answers were very helpful, and I passed your answer about college savings on to my son. We put three children through college without saving for college because we were funding our retirement account.

I went back to work part-time when the oldest started college and that is how we paid for their college expenses. Wish we had known so much of this years ago, we probably could have retired at a much younger age, but we have always saved so we are in a better position than most people our age. Hello there jlcollinsnh, i have a question for you.

Its about how to invest in Vanguard from sweden. I do know of one way, but thought i could ask if you know a smarter way before i start investing it. I am a 29yr old swedish gentleman, with a pretty new found interest for saving up for an early retirement. Im very interested about investing thru the Vanguard Total Stock Market Index Fund But i am unsure about my options for doing it from sweden. I know i can buy them over the market as a stock traded fund ETF. But im not sure if its the best way to get them for a person living in sweden.

Having a hard time understanding the info i see over the internet here, i did find a vanguard site for sweden, however, they have nothing like the Vanguard Total Stock Market Index Fund, the closest is a european index fund with about different stocks. And thats not at all what im looking for. From what i can se, the etf has an expense ratio of 0. However, id have to pay a brokerage fee every time i buy into it.

Brokerage-fees for buying american stocks is at Or would it possibly be better to buy every month, even though it bumps up the brokerage fee to 1. Couldnt find any info about it. I do know where to invest it, we have something called Investersparkonto here in sweden. Basically you dont pay any taxes on dividends, nor for the valueincrease if you sell off any shares later on, it gives you a lower tax then the others if your investments grow at a pace of more then 3. Instead you pay a small tax thats around 0.

My I ask a favor? There, my question is now over at the link you posted instead. I would save about an hour per day by being closer to work, and given the the fact that utilities would be cheaper and I would make money on top of mortgage, it seems like a good idea. Where is that going? The income is mine and the expenses are ours.

My goal is to increase my investments each month until the point that I get net-zero. OR save that money if I choose to go the house route. I have disability insurance through work. Well, you are One Good Writer and I am totally persuaded to take action on your investing advice but have hit a mental speedbump: My kids will be college age in about 5 years.

I understand any financial aid package will be diminished if my Vanguard balance is too high. I was thinking of foregoing the VTSAX in favor of ramping up contributions to my Plan and to our life insurance policy in addition to keeping on with the IRA contributons. Any opinions on this? My understanding is they use pretty sophisticated analytical tools when looking at income and assets.

So, if has you indicated, that is still the case your idea has merit. But you are closer to this and very likely are a better judge than I. As you sort it out, and if you are willing, you might share what you learn with the readers here.

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Foolish, I know. Once I graduate, I plan to permanently relocate and work in Latin America and start savings again, albeit at a much more modest rate than now. Savings Once Back in the Workforce ? How would you suggest investing? Keep the 80k needed for school low risk and highly liquid high-interest checking and CDs? Con: I risk having to make my aggressive 6. What do you think? Jim, thank you for all time, effort, and patience you put into helping us all. I really appreciate your advice. I have been reading your site for a few months now and was hoping to get some feedback.

We have had a slow start with many mistakes in the past. We are making a lot of money now and have been playing catch up. Early in we were 60K in debt. Out net worth is now K. We are ages 52 and Our financial scorecard is as follows:. My biggest question is about dollar cost averaging. I have been waiting to see what happens with all of the federal fiscal shutdown, debt ceiling, etc. I also have been thinking that the market is due for some kind of adjustment. My TD Ameritrade investments will be fee free to cash in starting in November.

My biggest question is how quickly and when? Any feedback you can give would be greatly appreciated. We just want to get to a place of financial freedom before retirement age. Take a look at the comments as well. As for dollar cost averaging, I am not a fan. Better to decide on the allocation that works for you. Sure, if the market goes down it might work in your favor. If it goes up it works against you. More of that pesky market timing stuffola! I guess my own fears about the market have been holding me back.

I have read the whole stock series but some lessons are harder to remember than others. What are your thoughts on converting to a Roth? Maybe the most important lesson is that the the market will have crashes, bears and corrections going forward. These are going to happen and are completely normal, in-spite of the panic in the media, and best ignored. Everybody makes money when the market is rising. But what determines if it will create wealth for you is what you do when the bad stuff happens. And definitely fund Roths for both of you each year your income is under the limit: k for Thanks for the great advice on this site and your rational and thoughtful approach to saving and investing.

At this point, I have not only read all of the posts on your site…. Your site, along with that of MMM is one of only two blogs that I will recommend to friends. However, with the way it is organized on the website, it is very difficult to read through the stock series one after another without digging through the archives. It would be nice to have a section for your stock series with a list of hyperlinks in order to these articles… or barring that, at least a hyperlink at the bottom of each stock series article that leads you to the next article in the series. If you look at the right hand column you see every post here organized by catagory.

Of course as I add new posts that one will get a bit out of date. But anyone who reads all those should be able to find their way to the others. Thanks for the quick reply! Those do help and are close to what I was looking for. I think there are two changes that might make them even more helpful, though. As a member of the U.

I currently hold a personal ROTH IRA through Vanguard investing in one of their target retirement accounts but would like to expand my retirement investment portfolio. TSPs great! Basically a better version of k plans and available only to military and other government employees. They offer a nice, but not overwhelming, selection of low cost index funds: only. Looking at the chart of ERs going back to , their ER has ranged from a low of. Still, even at the worst these are very low ERs. And they seem to be coming down in the last five years or so.

Good deal. Also a good deal is that the funds are index funds. The S-find is the small cap index. The F-fund is a bond index. As to the question of funding a TPS Roth, it mostly depends on your income. The more you make the more valuable the immediate deduction of the regular TSP. Thanks for writing the stock series! Such thorough, yet easy to understand for the lay person writing on personal finance is very hard to come by. You are doing the public an immense service!

The series should be required reading, if you ask me. I left my previous employer last year, and left my k untouched with Fidelity. But I also suddenly remembered I should consider rolling over a portion of it to Roth. Would really appreciate your thoughts. You are on to something with rolling at least part of your k into a Roth. Since you are not working in you have a window of opportunity to do the same.

Much of it will be lower. The compound interest calculator is awesome! Thanks for endorsing my plan to convert part of the k into Roth. Will do that before end of year. Anyways, thanks again for answering my question. Keep up the great blog! Hello, I would greatly appreciate your follow up on the republic wireless phone plan. I believe you were going to give your opinion once you were back from your travels.

Thank you. But in short, I love what RW is trying to do and their approach. The phone itself, not so much. They were planning to give me one to review, but I guess now they have only q few and more important people than I they want to have test them. Thank you for the feedback. I am not a heavy user of data if that is what you mean. In fact, my wife and I do not have smartphones at all. I am trying to decide whether to give up our verizon plan that runs a hundred smacks a month. I understand typical term vs.

I suggest you talk your specific situation over with a qualified planner, but here are a few examples where permanent insurance can really be useful. First, here are the features of permanent life insurance that make it useful: -it has a permanent death benefit and can be counted on to deliver cash exactly at death, no matter when death occurs unlike term insurance -life insurance death benefits are received income-tax free by the beneficiary -the asset can be owned outside of the estate of the insured useful when planning for estate taxes -the asset can be owned by any person or non-person, including businesses and trusts -the death benefit can be purchased with a stream of annual premium payments which are heavily discounted in the beginning -any inside build up of cash values occurs without current income taxation -amounts can be very predictable if general account based or can have tremendous growth potential if variable sub-account based.

Here would be some scenarios ranging from simple to complex and from low net worth to high net worth where a policy could be useful. One son works in the business but the other son does not. This could also work with other estates where the decedent has not-easily-divided assets such as real estate.

Younger partner is beneficiary. Client is charitably inclined. Client establishes a trust with the children as beneficiaries of the trust. Assets are willed to charity. There are literally dozens and dozens of examples that could be created. The key thing is that usually good planning involves a host of tools and is very individual. The key thing to remember is that estate tax and generation skipping transfer taxes are largely optional taxes.

Joshua is a friend of mine and I asked him to weigh in on this. He works in the insurance business and, as you can likely tell, has an in depth knowledge of how these tools work and how they might be used. So it takes very significant wealth before you need to consider this tool. Or a complex estate. Before I delve into the details, though, let me just say: this website is by far and away the best site on the Internet today!

You are intelligent, thoughtful, clever, and articulate. You write with brevity and wit. And you reply to every. That is incredible! I had never heard of FI or F-you money or even considered investing in the stock market until a month ago! Where I want to be in life: — Retire from present employment in years. My questions to you: 1. Is the above savings plan too weighted toward tax advantaged buckets, given that I want to leave full-time employment in less than 10 years?

But damn, yours is still one of the nicest compliments ever. If you find yourself in Manchester, coffee is on me! As the blog continues to grow I am finding it difficult to keep up with and respond to all the comments. Accordingly, I especially appreciate ones as well organized as yours: Easy to read details and specific questions. Plus there are ways to access tax-advantaged accounts penalty free if needed. Right now you want to go for maximum growth. So using that calculator, here are some potential results across conservative to aggressive return projections and looking at your 7 or 9 year working time frame, plus a 10 year.

A quick look shows that only three of these scenarios get you there and, worse, all three depend on returns at the upper range. If that part time work pays say 10k, that is the equivalent of k invested. The lower the percentage you need to draw, the more breathing room your investments have to grow, ideally to the point where you no longer need to work at all. All but one of these examples does that. Of course, no one can guarantee the future for the next ten years. Question should I pay down my mortgage or invest all in the market?

Any thoughts would be greatly welcome. Hello, love your blog. My request is a simple one; you had states that you would give yoir feedback on the Republic Wireless phone once you were back from your trip. So, what is the verdict? Hi there, great blog. Been following a year now, looking for life advice. Want to retire early, or at least take a year off starting next summer. Have great job, and 2 cash-flowing rentals.. Hoping this is good enough security blanket for extended time away…. Looking for recommendations for investing with money: dividend stocks, VTSAX, payoff mortgage, or buy another rental??

Additional rental requires more time however. I am not a fan of dividend stock investing, or really any sector specific investing strategy. Over time this will become more and more valuable both in the growth of the investment and the tax advantage. Not sure where headed, wife and I want to do big trip before maybe having kids.. Just wishing I was leaving soon as winter in New England is coming. Good points about dividends, I just feel nervous dumping my paycheck savings each month in the stock market with it near highs, and the fragile banking system, US debt, QE3, etc.. I know there are strong companies with good financial sheets, but I think maybe I should put savings in land or things I can touch and feel instead of wall st.

That said, there will always be crises going on. When those you listed are resolved new ones will take their place. These should not be what drives your investing. I came here on a work assignment when I was just about to turn My dilemma: After going through your stock series, the writing on the wall is quite clear: I have to invest in regular non tax exempt investment vehicle, namely, Vanguard index funds.

Which brings down our AGI, and consequently our marginal income tax bracket. One more thing: the money in the checking and savings accounts will be used in the very near future for the down payment of a house. So investing that stash is not currently an option. Should I really put in less in my k and Roth IRA, and start investing in non-tax exempt vehicles? But even if you do retire early there are strategies to work around this. My pal the Mad Fientist has done some great work in this area.

Bottom line? Keep funding your tax advantaged accounts to the max and before moving on to taxable accounts. Houses are poor investments and expensive indulgences. Nothing wrong with expensive indulgences as long as you can easily afford them and buy with your eyes wide open. We also currently have a house. Or rather, have a mortgage on the home we live. The mortgage rate is a measly 3. We took a decision to rent it out, and move into a smaller house closer to both our work. This arrangement would serve 4 purposes: 1. In a few months, or years, I can sell it off and pocket a neat profit.

We will be closer to our work places. Less time spent commuting, less mileage on car, less money on gas. The new place is in one of the best school districts in the state — better for our child. I especially like point 4. Our daughter is now in her last year of university and credits our town schools with great prep that has helped her enormously. Hello Jim, Let me start by thanking you for the valuable advice you provide through this blog. It is humbling, to say the least, that you are taking valuable time to assist other fellow investors.

The stock market is an incredibly powerful wealth building tool. But it is also a very wild ride. Everybody makes money when it goes up, but whether it makes you wealthy or not depends on your ability to resist panic when it drops. Until you KNOW you can, stay away. The Stock Series explains all this.

Finally, you might enjoy the interesting conversations regarding investing for non-USA folks in the comments here:. Plus UraniumC himself points out nobody is going to believe it anyway, so why bother? If you are interested, please subscribe to that blog.

Can I Buy Real Estate in an IRA?

JL: My 4 boys are 20 to 24 years old, still in school, working on the side and saving and discovering your site and wise council and life plan ideas. What do you suggest for their first minimum investments?


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Thanks, J. Sounds like your boys are very close to that. I would also suggest your boys open these account as Roth IRAs so they can enjoy tax free growth and, when the time comes, withdrawals forever. No worries. Just save the excess in the bank until they hit 3k and have them open a second, regular, account in VTSMX. But, before doing anything, be sure you and they take the time to read my stock series. I was watching a financial show, Truth About Money, on PBS yesterday, and it seemed to me they gave some very bad advice to a teenage investor.

It was just sitting in a checking account and I felt I either needed to tell him to start spending it or get it invested in something that should keep pace with inflation. My son is invested in a Vanguard target date fund. Can you think of any reason to make it more complicated? And even if one would want to, is there a way for a teenager of modest means to do so? Since my son has no earned income, IRAs were out. He is also already pretty well funded for college, so was not looking to force him into a college savings account. I had seen hints online that it was possible to open a Vanguard custodial account that did not come under any of these umbrellas, but after submitting the application, and talking with a few representatives, I finally just consented to the use of a UGMA account, as they could not come up with any other option.

He does seem content at this point to just let the money alone and see what happens with it, but I just worry about whether he might change his mind at some point and really want to spend the money on something. Anyway, are you aware of better options for minors who have some money to invest, and parents who want to let them do it, that lets the minor keep their money. Really enjoy your blog. Thanks, John. Sounds like Mr. Technically, Mr.

Edelman might be correct. Certainly not at Vanguard. More importantly, he has missed one of the key tenants of this blog: Simplicity. Truth is, if you are both so inclined, your son could stick with that one fund for the long haul and it will serve him well. In fact, that is the advice I would expect you to get most often. This will be a taxable event, however the amounts are so low this should be a non-issue. This is not a taxable event. As for UGMA, technically these are accounts opened with money that is a gift to the minor. It is just a matter of choosing which one.

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But if you want to, it should be easy to change. My bigger concern is that your son might decide to spend this money. By definition, only long-term money should be in the market. This means, at least five years out. More importantly, this could well turn him away from the wealth building power the market offers over decades. Like all of us investors, he needs to understand this is long ball and his fund will go down at times. But now is the best time to learn these critical investing truths.

Big fan here. Here are my details…. I try not to count company stock vesting in more than 3 years in my portfolio, since I may or may not be around by then. I have no plans for retiring in the next 2 years, but I may or may not seriously consider it after 2 years, possibly 3. Heck, even with my short term bonds, I have almost 2 years of expenses covered should my medium term bonds take a dive when interest rates rise again. I have a relatively good tolerance for volatility.

The bulk of my savings came from , so I am no stranger to buying stock while everyone is cashing out their ks. What I read into your comment is that you are young and enjoying your job. You might leave it in a few years, but you might also stay.


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And if Mr. Market were to move against you and you had to stay, it would be OK. This gives you tremendous flexibility and power. All market investors have made money this year and since But what determines whether the stock market will make and keep you wealthy is what you do in times like , , You need to burn into your brain that corrections, bear markets and crashes are all normal parts of the process. No one can predict them. But we can predict with certainty they pass and the market moves ever higher. Not understanding this in your gut, as well as your head, is as far as I can see the only real risk you face.

Thank you so much for taking the time to respond to my inquiries. I am definitely taking your advice and continue building up my stash in the total stock index fund. You have read me well. And if I have decided to step aside for a year or two while the market takes a down turn, my cash insurance gives me enough time to continue my adventures and return and get a job before having to draw upon my stock in a down market.

At the Chautauqua without exception everybody had a wonderful time, most describing it as one of, if not the, best weeks of their lives. They loved the place we stayed, seeing Ecuador, meeting and hanging out with us four bloggers. But the thing that they all said, to a person, really made it special was the chance to let their FU lifestyle hang out too. Was your advice to rebalance right at retirement because I personally like my job and have a good cash fund, or would it be the same for everyone? But, for those who are retiring with the bare minimum they need, moving gradually into it over a few years is the less risky approach.

Hi Jim, Let me begin by expressing my appreciation for all the time and energy you have devoted to providing the content on this website. I discovered both the MMM and your website just a few weeks ago and there has been a bit of an obsession consuming all the valuable information provided. Great stuff! If nothing else, my questions may provide some ideas for some future articles.

However, our investments are spread over many mutual funds combo of indexed and managed funds as well as we own several stock purchases. I know what I need to do as far as re-allocation goes based on your series. Questions: 1. I have seen some conflicting views on this point. Make sense? With our home equity, does it still make sense to also invest in the Vanguard REIT index if for no other reason than diversification of Real-Estate ownership?

In doing the re-allocation of my many mutual funds to the select few index funds in my non-retirement account, will the capital gains on those funds that are moved to another fund be subject to Taxes? My understanding is yes which could have some bearing on when and how swiftly I do the re-allocation as I believe I could end up paying dearly in taxes.