How to invest with Vanguard
July 21, 2014 10:27 PM Subscribe
What are your specific investment recommendations for someone who's 25 years old, self-employed (contractor), has $130k in savings and no debt?
posted by Forty-eight to Work & Money (14 answers total) 22 users marked this as a favorite
I've just started a Roth IRA and put it in the 2040 Target Retirement Fund, but my friend recommends the 2050 one. My other friend, however, thinks the 90% stocks and 10% bonds is too risky. Then I call a financial adviser, and he says he would be aggressive with the Roth IRA and put it in the S&P 500. With the $130K, however, he says he'd be much more conservative but wouldn't give specific recommendations during the free phone consultation. I am considering whether or not to become his client. He charges $1k a year for 10-12 sessions or $500 for 3 to 4 sessions.
So, if this was you and your money, where would you put the Roth IRA and where would you put the $130K? I may need this money in the future for a wedding and a house, but I shouldn't need all of it, and I would be saving up more money in the meantime.
I hear about "tax-advantaged vehicles" for the $130K, but I don't know what those are. Also, is it worth it to start an individual 401K or SEP IRA? I'm concerned about not saving enough for retirement with just the Roth IRA.
I would like a more hands off approach, as I don't know much about investing, as much as I've tried to learn about it. That's what drove me to consult a financial adviser.