Finance guy here, going teach you guys how to allocate your 401k, roth, investme

[hmgROCK]

my background is finance
going give you guys the elementary short version
hater need not reply

just for simplicity and simple math
so we can easily follow and understand
we going say, you have $20,000
50% stock ($10,000) and 50% bond index ($10,000)


stock index (50%)                           bond index (50%)
$10,000                                                  $10,000
(1,000 share)                                       (1,000 share)    

let's say this year stock went down $2,000   but  bond went up $2,000


stock index (50%)                           bond index (50%)
$8,000                                                  $12,000


you would than sell some of those bond and buy more stock


stock index (50%)                           bond index (50%)
$8,000                                                  $12,000
+$2000                                                  -$2,000
---------------                                             ----------
$10,000                                                   $10,000
(1,200 share)                                            (1,000 share)

so you sell stuff when it's high
and you buy stuff when it's low

hopefully, i make it easier for you guys to understand
this is the short version of allocating

[DuMa]

Well my 5 years old nephew just looked at your education and says that the only way to come up is if both parameters go up?

Like if the wife goes gambling with the husband, if one win and one lose, we go home even. 

Hard to come up that way homeboy

[treasure]

where's the part for 401k n roth?

[hmgROCK]

Well my 5 years old nephew just looked at your education and says that the only way to come up is if both parameters go up?

Like if the wife goes gambling with the husband, if one win and one lose, we go home even. 

Hard to come up that way homeboy

it's rebalancing
sell high, buy low


sure you might even it out

but now you have more share of the stock index

[DuMa]

How is that even a win?

Once you sell, you pay tax so your money is less now.

[hmgROCK]

How is that even a win?

Once you sell, you pay tax so your money is less now.

hey, i went back and edit "share" into the example
hopefully that will help explain/clear thing up a little

so yes

even thought the money $$$ add up to the same
and you pretty much come out on even
you now, have more share of the stock  up 200, for a total of 1,200 share of stock
this is what we call allocating, rebalancing.


so when stock recovery, you will get a big jump because you now have 1,200 share instead of 1,000
this is what we call allocating/rebalaning



so now you have


stock index                                           bond index
$10,000                                              $10,000
(1200 share)                                      (1000 share)



YOU DON'T PAY TAX IF YOU DO THIS ON A ROTH IRA
BECAUSE ROTH IRA ARE TAX FREE
FREE FREE

[treasure]

I don't have time to watch stock, buy, sell. I wish there was someone who will do it for me.

[hmgROCK]

I don't have time to watch stock, buy, sell. I wish there was someone who will do it for me.

than you want a target date index

https://www.schwab.com/public/schwab/investing/accounts_products/investment/mutual_funds/mutual_fund_portfolio/target_funds


scroll down
pick an age that you want to retire
they do all the allocating for you
low fee too

2008 - 2012   
SWYAX
   Schwab Target 2010 Index Fund   0.08   0.72
2013 - 2017   
SWYBX
   Schwab Target 2015 Index Fund   0.08   0.74
2018 - 2022   
SWYLX
   Schwab Target 2020 Index Fund   0.08   0.81
2023 - 2027   
SWYDX
   Schwab Target 2025 Index Fund   0.08   0.79
2028 - 2032   
SWYEX
   Schwab Target 2030 Index Fund   0.08   0.83
2033 - 2037   
SWYFX
   Schwab Target 2035 Index Fund   0.08   0.80
2038 - 2042   
SWYGX
   Schwab Target 2040 Index Fund   0.08   0.84
2043 - 2047   
SWYHX
   Schwab Target 2045 Index Fund   0.08   0.81
2048 - 2052   
SWYMX
   Schwab Target 2050 Index Fund   0.08   0.85
2053 - 2057   
SWYJX
   Schwab Target 2055 Index Fund   0.08   0.82
2058 or later   
SWYNX
   Schwab Target 2060 Index Fund   0.08   0.82



this is a easy route if you don't want to deal with investing
just pick a date that you want to retired
and conbrution, you don't have to rebalance or allocated

everything is done
lazy man portifolo
just buy this only, it has everything you need

[hmgROCK]

i don't like BSing, when it comes to $$$$

go schwab.com open a roth ira account. pick a date you want to retire
contribution $5,500  annual
this is all you need to buy.
google the ticker if you don't believe me
it has everything you need,
apple, microsoft, pepsi, etc...



2008 - 2012   
SWYAX
   Schwab Target 2010 Index Fund   0.08   0.72
2013 - 2017   
SWYBX
   Schwab Target 2015 Index Fund   0.08   0.74
2018 - 2022   
SWYLX
   Schwab Target 2020 Index Fund   0.08   0.81
2023 - 2027   
SWYDX
   Schwab Target 2025 Index Fund   0.08   0.79
2028 - 2032   
SWYEX
   Schwab Target 2030 Index Fund   0.08   0.83
2033 - 2037   
SWYFX
   Schwab Target 2035 Index Fund   0.08   0.80
2038 - 2042   
SWYGX
   Schwab Target 2040 Index Fund   0.08   0.84
2043 - 2047   
SWYHX
   Schwab Target 2045 Index Fund   0.08   0.81
2048 - 2052   
SWYMX
   Schwab Target 2050 Index Fund   0.08   0.85
2053 - 2057   
SWYJX
   Schwab Target 2055 Index Fund   0.08   0.82
2058 or later   
SWYNX
   Schwab Target 2060 Index Fund   0.08   0.82

[treasure]

I don't know what those numbers mean.

For now all I have is maxing out 401k every year and hope to become a millionaire when I retire.

What's the best way to invest for my son? I have alotted some $ every paycheck and just placing it in a savings account. Need to invest it but unsure how.

[treasure]

You mean I can only contribute max of $5,500 annual?

What if I'm the only one working, can I do $5,500 for me and another $5,500 for my spouse?

[hmgROCK]

I don't know what those numbers mean.

For now all I have is maxing out 401k every year and hope to become a millionaire when I retire.

What's the best way to invest for my son? I have alotted some $ every paycheck and just placing it in a savings account. Need to invest it but unsure how.

pick a date (year that you want to retired)
than just contribution
you only need to buy one
these are manage/allocate/rebalance every year
if you don't want to do any of the above



for your son, see if your state has a child saving program and get into that
CD is nice too.

[hmgROCK]

You mean I can only contribute max of $5,500 annual?

What if I'm the only one working, can I do $5,500 for me and another $5,500 for my spouse?

for roth ira
max cap is $5,500

but you need to make that much to contribution that much
because it has a income limit

so if you only make $4,000 for the year
you can only do $4,000 to your roth IRA

so if you make $30,000
you can only do $5,500 because that is the max cap


you can do one for you and your spouse (don't have to work, if you guys do marriage  jointly tax together)

so $5,500 for you and $5,500 for your spouse

[treasure]

so what's the difference in opening a roth account with the website you recommend and the Vanguard website?

[hmgROCK]

so what's the difference in opening a roth account with the website you recommend and the Vanguard website?

Vanguard is good too

Vanguard, Schwab, fidelity
Those are the big three


The fee are pretty low

I think, I have to google their fund again

Vanguard minimum start up is like $1000
Fidelity $2500
Schwab. Less than $100


I personally use Schwab
But you can pick any of those three