Short Term (5-10 years) Investing

[carlon]

Looking to getting some advice to investing/saving for the short term future, thinking 5-10 years. I would like to start being a little more aggressive with growth as I feel a little behind the curve. Here is a breakdown where I am at currently, any advice is welcome.

• AD, 30 yo, promote to E-6 next month, 7.5 yrs TIS, married, 2 kids, base housing. Zero debt as of January 2018. Wife is stay-at-home parent.
• BRS, 20% base pay w/ matching. TSP balance $26.4K. I was an idiot and had it all in G fund for the first 5 years, switched to L 2050 (saw decent returns), and recently switched to C (70%) / S (20%) / I (10%) after reading some threads here.
• Basic savings w/USAA is at $25.8K and I would like to move a majority to a HYSA. One note, my wife refuses to have any less than $20K in a quick/accessible savings for emergency fund. So, I am looking at around $5K to possibly start a Vanguard brokerage account. As for emergency fund, I would like to see it in a HYSA, if anyone has recommendations.
• Vanguard Roth IRA - $6K, will max out 2020 within next few months. Just opened recently after reading around on here.
• All in with monthly bills/groceries/gas/misc/insurance I am around $1,400, leaving about $1K for future savings/investing monthly.

I am not very investing savvy but I will go ahead and say thanks for everyone on this sub. I have learned a lot in a short time.

 

[abidingpatri0t]

@carlon Why the short term 5-10 years? CDs, HYSA, or money market funds are your best bet for that, maybe a BND total market bond fund.

You could max out a Roth IRA for yourself and your wife if you married filing jointly. Wife doesn't need her own income. You can always withdraw Roth contributions penalty free. That's another $6k a year for retirement/accessible funds in a pinch.

 

[carlon]

@abidingpatri0t I say short term because the idea of FIRE is kind of a goal but not necessarily something I want to absolutely do. As for the ROTH IRA, I set one up in my name already. Are you saying I can have a second? We do file jointly for taxes.

Thanks for the advice!

 

[momta4blessed]

@carlon I'm just now starting out my career so I'm not experienced by any means but I've opened up a normal brokerage account with Schwab. I chose Schwab because I wanted to use their checking account as well but from what I've read fidelity and vanguard offer similar low cost investment services.

I have a hysa account where I keep my emergency fund and a bit of extra cash.

I put 30% of my paycheck into tsp

20-30% of my paycheck into the brokerage account

The rest I spend.

For the brokerage account I've stuck mainly to ETFs and mutual funds. I looked at the boggleheads website for portfolio examples and modified one that looked good to me. I've only put like $200 into individual stocks with the understanding that this is only for my entertainment.

I intend to spend the money in the brokerage account for a house or to ETS in 4-10 years. The way I see it, or the way I saw it when I started in March was that the market in 4 to 10 years would probably be higher than it is now. And if it wasn't I could contribute more to my HYSA in the months before I ETS/look at houses.

I believe vanguard offers an etf/mutual fund just for those looking at a 5 to 10 yr investment horizon. It's diversified with bonds, stocks, etc.

Just thought I'd add what I've been doing. I feel like this sub focuses too much on retirement and not the steps in between. But then again I've only just now started out professionally so there may be something I'm missing.

 

[carlon]

@momta4blessed I think it’s more people are solely looking at long term future as opposed to 5 to 10 years. Nothing wrong with that at all, I am just trying to weigh my options. Thanks for your advice! You seem to be doing well!

 

[kayval926]

@carlon You can use target date funds as a guide on how to allocate your money. For example the L2030 fund is 60/40 stocks/bonds. That would go against the FIRE plan that's usually super aggressive right up until you retire early.

 

[soulgenesis]

@kayval926 FIRE is not aggressive right until retirement. It’s investing a ton while young and letting it grow, shaving the fat form your budget and focusing on investments instead of Keeping with the Jones. You absolutely get more conservative as you near retirement so you reduce your risk