Help investing 80k

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SimplyInvest
Posts: 1
Joined: Wed Dec 01, 2021 7:25 pm

Help investing 80k

Post by SimplyInvest »

Questions:
1. If you had an additional 80k where would you invest?
2. For someone my age, what percentage would you invest in VTSAX? Stocks? Crypto? NFts? Somewhere else?

Emergency funds: 3mo -10k

Debt: No debt

Tax Filing Status: Single, No Children

Tax Rate: 24% Federal, 9.30% State

State of Residence: California

Age: 30

Desired Asset allocation: ? - Comfortable with aggressive investing
Desired International allocation: n/a

Total portfolio:
low six-figures

VTSAX $180k (75% stocks, 25% bonds)
Currently have 3k auto-investing each month.

Bank: 80k to invest

Current retirement assets

VTTSX Vanguard Target Retire Trust Plus 2060: 40k invested (maxed out contribution this year)
6% company match

Goals:
Get to high six-figures+ for an earlier retirement.
Willing to take risks.
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David Jay
Posts: 14587
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Help investing 80k

Post by David Jay »

Welcome to the forum!

We teach that Asset Allocation (AA), or stock-to-bond ratio, is the primary control knob for potential gain versus price stability. Stocks give higher potential growth and fixed income give more price stability.

At your age, if you choose to be aggressive, holding all stocks or nearly all stocks (say 90/10) is the way to go. Total US stock (VTSAX) is the default, low regret method to invest in the entire US stock market at rock bottom cost. If it's me and I do not need to access this money until retirement, I put the entire 80K in VTSAX.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
Doctor Rhythm
Posts: 3061
Joined: Mon Jan 22, 2018 2:55 am

Re: Help investing 80k

Post by Doctor Rhythm »

Welcome.

Two ways to think about this.

Does the extra $80K make you feel more confident in taking risk, so that you can be more aggressive than your current asset allocation? Or does it make you feel you’re a couple years closer to achieving your retirement goal, so you can be more conservative going forward.

Not sure? Then just invest it according to your current allocation.

Oh and by the way, we don’t discuss crypto here (and presumably NFTs as well).
Last edited by Doctor Rhythm on Wed Dec 01, 2021 9:26 pm, edited 3 times in total.
retire2022
Posts: 3286
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Help investing 80k

Post by retire2022 »

Simplyinvest

Put more in emergency fund?

Usually it is six months of expenses.

Then I would consider 6k for Roth IRA, this could be your most riskiest space as withdrawals after five years is deemed “qualified” and tax free.

The rest could go into VTI taxable.
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Alto Astral
Posts: 970
Joined: Thu Oct 08, 2009 10:47 am

Re: Help investing 80k

Post by Alto Astral »

+1 for VTSAX. I recommend the location to be in Roth IRA (or backdoor) first. Then have 10k in i bonds for a year. Next year use the i bonds as emergency funds and transfer the remaining 10k to roth and then taxable.
tashnewbie
Posts: 4284
Joined: Thu Apr 23, 2020 12:44 pm

Re: Help investing 80k

Post by tashnewbie »

Welcome to the forum!

This Bogleheads wiki article about how to prioritize different accounts for investing should be helpful: link

I would max my tax-deferred 401k. It's $19.5k for 2021. You may not have enough time before the end of the year to max it, if you haven't already. It's $20.5k for 2022. Set the deferral percentage so that you'll max it by the end of each year. Use the $80k for regular living expenses if paychecks become too small.

Then I'd also max a Roth IRA for 2021 (have until April 15, 2022 or whatever the tax filing deadline is) and in January, I'd max it for 2022. $6k for each year.

After those and setting aside any money I planned to spend in the next year or so, I'd put it in VTSAX in a taxable brokerage account.
zie
Posts: 1094
Joined: Sun Mar 22, 2020 4:35 pm

Re: Help investing 80k

Post by zie »

So, what I would do with the 80K is move it to BOA's Merrill Edge for the Credit Card(CC) bonus, 80K isn't quite the 100k needed for the best bonus, but 80K will get you close and net you a 50% bonus in the meantime. There is a thread here: viewtopic.php?f=2&t=150033 about it.

I'd then do per tashnewbies advice, work on moving it into tax-advantaged accounts, so that you can avoid future taxes on all the earnings you will get from it.

As for what to invest it in, just whatever you are investing in now, why should this money be treated differently? Money doesn't know or care where it comes from.

If you are unsure if your current investing strategy is a good one, that's a different discussion, and in all my learning so far, I'm starting to come around to, it doesn't matter all that much, as long as one avoids all the big giant mistakes(panic selling, taking outsized risks, etc)
Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates. -Hetty Green
mikejuss
Posts: 2833
Joined: Tue Jun 23, 2020 1:36 pm

Re: Help investing 80k

Post by mikejuss »

Following the lead of your username, I would recommend investing the money, in one lump sum, in VTSAX.
50% VTSAX | 25% VTIAX | 25% VBTLX (retirement), 25% VTEAX (taxable)
wetgear
Posts: 859
Joined: Thu Apr 06, 2017 10:14 am

Re: Help investing 80k

Post by wetgear »

mikejuss wrote: Thu Dec 02, 2021 8:58 am Following the lead of your username, I would recommend investing the money, in one lump sum, in VTSAX.
+1 simplyinvest at your target AA
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ruralavalon
Posts: 26353
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: Help investing 80k

Post by ruralavalon »

Welcome to the forum :) .

SimplyInvest wrote: Wed Dec 01, 2021 8:10 pm Questions:
1. If you had an additional 80k where would you invest?
2. For someone my age, what percentage would you invest in VTSAX? Stocks? Crypto? NFts? Somewhere else?

Emergency funds: 3mo -10k

Debt: No debt

Tax Filing Status: Single, No Children

Tax Rate: 24% Federal, 9.30% State

State of Residence: California

Age: 30

Desired Asset allocation: ? - Comfortable with aggressive investing
Desired International allocation: n/a

Total portfolio:
low six-figures

VTSAX $180k (75% stocks, 25% bonds)
Currently have 3k auto-investing each month.

Bank: 80k to invest

Current retirement assets

VTTSX Vanguard Target Retire Trust Plus 2060: 40k invested (maxed out contribution this year)
6% company match

Goals:
Get to high six-figures+ for an earlier retirement.
Willing to take risks.
It's good to see that you have made the maximum annual employee contributions to your employer's 401k plan.

If eligible you should also make the maximum annual contribution ($6k) to an IRA. Wiki article, "Prioritizing Investments ".

At age 30 you cannot have had any significant investments during the last prolonged market crash which started in 2008, when you were just 17. So you cannot possibly know your actual "comfort level" for "aggressive investing".

For the $80k ($74k if you use an IRA) I suggest an asset allocation of 80% stocks/20% bonds. My suggestions are as follows.

80%, in a taxable brokerage account using very tax-efficient stock index funds like Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04%.

Wiki article, "Tax-efficient Fund Placement ".

20%, using I savings bonds. "Series I Savings Bonds (often called I Bonds) are government savings bonds issued by the U.S. Treasury that offer inflation protection. I Bonds offer tax-deferral for up to 30 years and are free from state and local taxation. " The purchase limit is $10k annually. "The composite rate for I bonds issued from November 2021 through April 2022 is 7.12 percent. This rate applies for the first six months you own the bond", Treasury Direct.

Edits for grammar, punctuation and spelling.
Last edited by ruralavalon on Thu Dec 02, 2021 10:15 am, edited 3 times in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Onlineid3089
Posts: 780
Joined: Thu Jan 02, 2020 2:47 pm

Re: Help investing 80k

Post by Onlineid3089 »

Figure out what tax advantaged space you haven't filled. Fill that. Hold enough cash to fill all tax advantaged space next year, too. VTSAX and chill the rest.
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