Comments on: Simplify Your Finances: Organize Your Investments http://www.moneycrashers.com/simplify-your-finances-organize-your-investments-2/ Personal Finance Blog, Your Guide to Financial Fitness Thu, 09 Feb 2012 20:13:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: ekrabshttp://www.moneycrashers.com/simplify-your-finances-organize-your-investments-2/#comment-6020 ekrabs Mon, 16 Jun 2008 22:04:40 +0000 http://www.moneycrashers.com/simplify-your-finances-organize-your-investments-2/#comment-6020 I like your plan as it is simple, but can be effective. Personally, I don't care for real estate due in part to its high cost of entry. However, if one MUST do real estate (not REITs, or companies involved in real estate or the housing market) then I agree that paying for cash up front is the best way to go... but did I mention high cost of entry? For the rest of your investments, may I recommend looking into something like a Target Retirement Fund? It's a fund of fund set the asset allocation as well as rebalancing for you. You just set it and forget it! And it's pretty good too. If you insist on DIY, I recommend to be careful about over-weighing your funds towards correlated funds. For example, why would you want 3 large cap growth funds? What's wrong with 1? Also, many index funds will naturally have a large percentage weighted towards large caps to begin with, so having even large caps-- in my opinion anyway-- sort of defeats the purpose of diversification in the first place. Again, please feel free to take a look at Target Retirement Funds. You'll see that the asset allocation is already set for you. If nothing else, I think it'll give one a better idea on what their funds should probably look like (which should probably include some international fund, a small cap, maybe a mid cap, and even a quality bond fund). In fact, chances are very good that I'll roll my 401k into Vanguard, simply buy their Target Retirement Fund there, and call it a day.... I like your plan as it is simple, but can be effective.

Personally, I don’t care for real estate due in part to its high cost of entry.

However, if one MUST do real estate (not REITs, or companies involved in real estate or the housing market) then I agree that paying for cash up front is the best way to go… but did I mention high cost of entry?

For the rest of your investments, may I recommend looking into something like a Target Retirement Fund? It’s a fund of fund set the asset allocation as well as rebalancing for you. You just set it and forget it! And it’s pretty good too.

If you insist on DIY, I recommend to be careful about over-weighing your funds towards correlated funds. For example, why would you want 3 large cap growth funds? What’s wrong with 1? Also, many index funds will naturally have a large percentage weighted towards large caps to begin with, so having even large caps– in my opinion anyway– sort of defeats the purpose of diversification in the first place.

Again, please feel free to take a look at Target Retirement Funds. You’ll see that the asset allocation is already set for you. If nothing else, I think it’ll give one a better idea on what their funds should probably look like (which should probably include some international fund, a small cap, maybe a mid cap, and even a quality bond fund).

In fact, chances are very good that I’ll roll my 401k into Vanguard, simply buy their Target Retirement Fund there, and call it a day….

]]> By: Bill@TheWealthHunterhttp://www.moneycrashers.com/simplify-your-finances-organize-your-investments-2/#comment-6001 Bill@TheWealthHunter Wed, 04 Jun 2008 15:54:31 +0000 http://www.moneycrashers.com/simplify-your-finances-organize-your-investments-2/#comment-6001 This is a GREAT plan for simplifying your finances. If you're employed, there's nothing better than a 401(k) with a matching contribution from your employer. Yes, it is like you're getting free money from your company. And opening a Roth IRA is great if you qualify for one. I just have a question about your Real Estate Investing strategy. I understand why you want to pay cash. But my question is how much cash do you want to accumulate before you buy an investment property? And how long will it take you to accumulate that cash? The reason I ask this is because the multi-family RE investments that I'm researching now cost at least $400,000. And for me to accumulate $400K by putting just 25% of my net income towards it would take me 13 years to accumulate that cash. That's why I'm looking to finance at least part of it - I don't believe in the No Money Down scam. That will make your bankrupt fast. Thanks for the great post. Keep posting. Bill This is a GREAT plan for simplifying your finances. If you’re employed, there’s nothing better than a 401(k) with a matching contribution from your employer. Yes, it is like you’re getting free money from your company. And opening a Roth IRA is great if you qualify for one.

I just have a question about your Real Estate Investing strategy. I understand why you want to pay cash. But my question is how much cash do you want to accumulate before you buy an investment property? And how long will it take you to accumulate that cash?

The reason I ask this is because the multi-family RE investments that I’m researching now cost at least $400,000. And for me to accumulate $400K by putting just 25% of my net income towards it would take me 13 years to accumulate that cash. That’s why I’m looking to finance at least part of it – I don’t believe in the No Money Down scam. That will make your bankrupt fast.

Thanks for the great post. Keep posting.
Bill

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