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fireman44

Supplemental Annuity Collective Trust Of New Jersey (Sact)

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I will take your advice and use Vanguard for my Roth IRA.

 

I have been reading a book by Dave Ramsey. I am not sure how you all feel about him but my co-worker ( who gave me the book to read ) swears by him.

In his investing section he recommends Mutual funds for your IRAs. He says to divide your investments equally among Growth, Growth+Income, Aggressive Growth and International Funds.

 

Dave does not own single stocks and does not suggest single stocks as part of an investment plan. Single stocks dont consistently generate returns as high as mutual funds in the long term. If you do want to own stocks , limit single stocks to no more then 10% of your investment portfolio.

 

Dave does not own any bonds and does not suggest them as part of your investment plan. People mistakenly believe bonds are safe investments that have slightly lower rates of return than equities. Single bonds can be very volatile and go down significantly in value. Bond mutual funds can at least be tracked for historical returns but do not offer the returns equity mutual funds do.

 

I think the most confusing part of doing my research is seeing how some people recommend certain things and some people stay to away from those things. But i am doing lots of googling and reading on where to invest in my Vanguard Roth IRA.

I will be buying the Bogleheads book of investing as well!

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I think the most confusing part of doing my research is seeing how some people recommend certain things and some people stay to away from those things.

 

 

 

Fireman

 

I would sometimes listen to Dave Ramsey coming back from work each day as he is on our local channel.

 

My opinion is that his main area of expertise is not investing. I have heard him say things about investing that would raise eyebrows among the real experts. Mr Ramsey's advice is well suited for folks trying to make financial life decisions like credit card debt and getting out of financial troubles and buying insurance correctly. He is good at that kind of subject matter. He has helped a lot of people

 

His financial advice I think is too broad and incomplete. Telling someone to invest in a good aggressive growth fund as I have heard him recommend to callers is too vague. Of course It is a call- in radio show so advice will always be somewhat incomplete.There is a danger in that. Of course I have never read any of his books and (don't plan to ) so maybe he fills in the blanks there. I do know he thinks everyone should be able to get a steady 12% return on their mutual funds which is unrealistic.

 

If you invest in Vanguard Total Stock Market Index-you will be invested in all the growth funds you need. Vanguard International Index would give you all the international you need. As you get older you should add Vanguard Total Bond Index in proportion to your age(give or take a few years) to keep your hard earned money from being lost. During downturns an all stock portfolio could lose 50-60% of its value in a worst case scenario.His insistence that bonds funds in a portfolio are a bad idea is foolish. Bonds are critical as you get older to protect you losing all your money as you are getting ready to retire. Bond funds will never lose that much. We recommend Vanguard above all others because they are a not- for- profit company, it charge the lowest fees in the industry, and puts the investor first.

 

Also remember everyone is out to make a buck. So you can't believe everything you read or hear . The financial industry is not known for its honesty. Steve recommended John Bogle. I would follow Bogle's advice above all others even though there are other great financial minds out there.

 

 

Fireman, trust us at 403bwise. I was once you and I got hurt taking other people's investment advice including so-called financial advisors and experts. Once I found this site it changed my financial life for the better. Keep asking us question and we will lead you to the truth.

 

Tony

 

 

P.S. Steve's book Late Bloomer Millionaires is a good read on the dangers of investing in high flying mutual funds, market downturns, and why bonds matter.

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Tony,

 

I do trust you all replying back to me here on 403b. And I want to take time out to truly thank you all for helping me and helping others in these complicated matters of retirement and investing.I am very appreciative of you all for taking time of out of your busy day's to educate and help people. This forum is a blessing with all this much knowledge and experience.

 

So I have decided to go with Vanguard.

I have spent the past few hours researching vanguard investment options. I have researched what you all have recommended to me.

 

Now in my situation,

i would not be touching this money in the Roth IRA for the next 30 years

I will be receiving a pension in 18 years if I chose to retire at that time. At MINIMUM ( If the laws don't change ) I will be receiving $65,000 from the pension system. And i will also have all my quarters in social security for even later down the road.

 

So looking at this I can be aggressive in the Roth IRA. On a scale of 1 to 10 (being most aggressive) I would like to be at a 7.

However i am a Super Conservative person in saving money and not much taking risks with my money.

 

I have seen graphs with depositing $5,500 for 30 years ( $165,000 ) that people can turn it into a Million dollars with proper investing.

Being super conservative I would be happy just making guaranteed 3 times of the $165,000 investment into $500,000.

 

My game plan is for me to be aggressive for the first 20 years or so. When I turn 50. After that the rest of the 10 years I will switch from aggressive to conservative.

So I will not be changing anything once I make the final decision until later on when It's time to go conservative.

 

Steve recommended for me to start with the Vanguard Wellington. I have read nothing but good things about it and it seems perfect for me with the AA of being semi aggressive. It is an actively managed fund which is a positive.

In my research I saw someone mention AA of 80% into Wellington and 20% into REIT is a strong way to go.

 

I have read great things also about the Vanguard Star that you mentioned Tony.

 

Also the Target Retirement Funds is very interesting and another strong option.

 

And like you mentioned Tony in the previous post an AA of 70% into Total Stock Market Index + 30% Total Bond Market Index Fund is another very solid option.

 

I have looked over the Lazy Portfolio's on Bogleheads. Many more options for different routes to go.

 

With all these great options for myself how do I make a final decision to complete my vanguard portfolio?? How do I make a final decision??

What would be the best ultimate decision if you were in my shoes and being aggressive for the next 20 years.

Thank you all so much again and Happy 4rth of July!

 

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I believe keeping things simple is key. I once owned 28 funds and I have regretted it. Funds here and funds there. Now I only own a few funds and all index funds. Rebalancing and diversifying and picking funds is hard work and making mistakes is easy.

 

That is why I would recommend this fund for you. https://investor.vanguard.com/mutual-funds/target-retirement/#/

 

Why?

 

1. Its already diversified

2. Its already managed for you.

3. Its starts aggressive and gets less so as you get closer to retirement.

4. You can't beat the costs

5. Easy to manage-you do nothing!!

6. Its made up of index funds. Index funds beat managed/active funds 70-80% of the time. You will make more money in the long term.

 

Thats my advice!!!!

 

Tony

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Thanks for that link Tony. I read it and now see what you mean by not trusting Dave Ramsey for investing advice!

 

I have done research on the Vanguard Target Retirement Fund 2045 (when i will retire) and I am not completely comfortable with it. I have read a few articles that are against it and explain there reasoning. But the main reason is its way to aggressive for me where I feel comfortable. Its 90:10 and it will probably stay like that for years. I would prefer to be around 70:10.

So I think the best options I am looking at are:

 

-Wellington 65:33

-Vanguard LifeStrategy Growth fund 80:20

-70% into Total Stock Market Index and 30% Total Bond Market Index Fund

 

-or get creative and do 50% of my money into LifeStrategy Growth fund (80:20) and 50% of my money into LifeStrategy Moderate Growth Fund (60:40)

-another creative option. 50% of my money into Wellington and 50% of my money into LifeStrategy Growth Fund.

 

I am having a lot of fun with this and doing so much research! I have found a new hobby! Lol

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Fireman

 

Your ideas are good. Just keep in mind you can pick any target retirement fund you like. You could pick one more conservative. It doesn't have to be the one closest your retirement date if it feels too aggressive for your taste.

 

Tony

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Update:

So I finally made the move and opened up a Roth IRA with Vanguard! I did the minimum deposit of $3,000 and bought the Total Stock Market Index with that $3,000. It came down to the Total Stock Market Index and the LifeStrategy Growth Fund (( i hope i didnt make a mistake not picking the LS :-/ ))
Since unfortunately I'm limited to only depositing $5,500 this year I can't purchase the Total Bond Market Index since they are both $3,000 minimums.
So I'll be 100% into stocks for a half a year to a year, which at 30 years old some will say is not a bad idea. Then i will buy bonds next year.

Now my question,

How do i monitor My Total Stock Market Index Fund? If watching tv for the stock market daily close or checking on the internet for the daily stock market close, what am I looking for in correlation with my Fund? How can I determine if it's doing good or bad?

https://personal.vanguard.com/us/funds/ ... =INT#tab=2 ( my Fund )
http://money.cnn.com/data/markets/ ( what am i Looking at here ) ? Nasdaq? Dow?

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Fireman

 

Go to morningstar and create your free portfolio. It will show you your funds daily ups or downs and will also show you the year to date performance. Thats what I use.

 

https://members.morningstar.com/Register/Portfolio?vurl=687474703A2F2F706F7274666F6C696F2E6D6F726E696E67737461722E636F6D2F5274506F72742F5265672F416C6C566965772E617370783F4849443D4850475F4C4E4B313034&referid=A3539

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Thanks very much Tony. I will do that!

Also do you have any good websites you recommend that talk about the current state and future projections of stocks?

I could use some good websites to save for all my future research!

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Fireman

 

Don't get overly involved in projections and current state of stocks or ratings.Total stock market index will have hundreds of stocks in it. All stocks will flucuate. The key is regardless of whether they go up or go down, don't get emotionally involved. Leave them be and you will be rewarded. Buy and selling only lowers your return.

 

Here aee some sites that might be useful to get you started

http://portfolio.morningstar.com/Rtport/Free/InstantXRayDEntry.aspx

http://money.usnews.com/funds/mutual-funds

https://www.bogleheads.org/forum/index.php

http://www.maxfunds.com

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