2 months living expenses in a Federally Chartered BANK
2-4 months living expenses in a Treasury ST Bond or Money Market fund. Alternatively, very short CDs. Pay off cards
Pay off car, unless it is a special low rate from manufacturer. After that, it is investing decision...
Good thoughts. One comment, just an opinion. Index funds have been great for the past 20 years. ALL of them now are very top heavy, depending on the performance of 7 stocks, even the 'global' ones. Consider low cost managed funds. Yes you are paying 0.5% and not 0.05% management fees. No strategy works forever, and I believe the index and forget one has run its course. Small caps and emerging markets require expertise and local knowledge. Large cap indexes have the risk of the 'magnificent 7' stocks. Over 20 years, either strategy will likely have significant gains. But, a major downturn will crush Indexes. If it happens sooner than later, future values will be likewise crushed. Managed funds should avoid at least some of the carnage. On annuities, you are betting that the selling company will stay in business. No different than buying corporate bonds. Likely many other considerations, so I will leave that asset class to the experts.
Good work. While Ramsey makes good points, careful. Paying off mortgage should not be an automatic thing. That is a 'good' debt, depending on the rate. He also advocates too much stock exposure for older people, in my opinion. Index funds WERE the way to go, but with massively overvalued key stock in the S&P500, not so sure now.
I have enjoyed your writing for years. Some thoughts on investing in my retirement now. Goal is to not touch capital and try to mitigate Inflation. With ST Treasuries over 5%, there is really little reason to have stocks. Market significantly elevated and likely to fall in next year. Even if I am wrong, 5%+ is a good return... and a positive one. We have had an environment where you just buy Index funds and go to the beach. I believe those days are behind us. All of the S&P gain has been in a handful of stocks. No strategy lasts forever. When equities become attractive again, we can chose from actively managed ETFs that could be the next good way for equity exposure. I do agree that the media and pros make this all too complex. Your timeframe for needed the money is the key variable. And, in retirement, you cannot make up large bad bets.
Comments
2 months living expenses in a Federally Chartered BANK 2-4 months living expenses in a Treasury ST Bond or Money Market fund. Alternatively, very short CDs. Pay off cards Pay off car, unless it is a special low rate from manufacturer. After that, it is investing decision...
Post: How much emergency money should you hold?
Link to comment from December 23, 2023
Good thoughts. One comment, just an opinion. Index funds have been great for the past 20 years. ALL of them now are very top heavy, depending on the performance of 7 stocks, even the 'global' ones. Consider low cost managed funds. Yes you are paying 0.5% and not 0.05% management fees. No strategy works forever, and I believe the index and forget one has run its course. Small caps and emerging markets require expertise and local knowledge. Large cap indexes have the risk of the 'magnificent 7' stocks. Over 20 years, either strategy will likely have significant gains. But, a major downturn will crush Indexes. If it happens sooner than later, future values will be likewise crushed. Managed funds should avoid at least some of the carnage. On annuities, you are betting that the selling company will stay in business. No different than buying corporate bonds. Likely many other considerations, so I will leave that asset class to the experts.
Post: Happily Ever After
Link to comment from December 16, 2023
Good work. While Ramsey makes good points, careful. Paying off mortgage should not be an automatic thing. That is a 'good' debt, depending on the rate. He also advocates too much stock exposure for older people, in my opinion. Index funds WERE the way to go, but with massively overvalued key stock in the S&P500, not so sure now.
Post: Finding Hope
Link to comment from September 13, 2023
I have enjoyed your writing for years. Some thoughts on investing in my retirement now. Goal is to not touch capital and try to mitigate Inflation. With ST Treasuries over 5%, there is really little reason to have stocks. Market significantly elevated and likely to fall in next year. Even if I am wrong, 5%+ is a good return... and a positive one. We have had an environment where you just buy Index funds and go to the beach. I believe those days are behind us. All of the S&P gain has been in a handful of stocks. No strategy lasts forever. When equities become attractive again, we can chose from actively managed ETFs that could be the next good way for equity exposure. I do agree that the media and pros make this all too complex. Your timeframe for needed the money is the key variable. And, in retirement, you cannot make up large bad bets.
Post: On Second Thought
Link to comment from September 9, 2023