The 36-year-old who sits at $ 2.5 million Ira asks Reddit: “Do I rise this for growth or settle for safety?” Experts and amateurs clash
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The centuries -old discussion between growth and security is one of them investor He struggles at some point in his investment.
The choice between growth and security often comes down to the tolerance of investors’ risk, financial goals and a time horizon. However, with $ 2.5 million Already in the bank, the roles are high, and the limit for the error is very thin.
For a 36-year-old who was sitting on this type of cash, a discussion between growth and security is especially pressure: should you take over an additional risk for the chances of a higher yield or should he play for sure that he should retain his wealth?
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The 36-year-old found himself in an enviable position after the fall of the ownership plan with his previous employer.
“It’s pretty wild and completely unexpected – before buying, my shares were worth about $ 300,000; I have been with the company all my career (12 years), so it’s crazy. I lost my job in the process, but I landed on a new one the same week when I was released at 90% of my previous salary, and it seems that it is a lot, much, much better company, so everything has succeeded, “the investor on Reddit shared.
Now, with $ 2.5 million sitting in the faithfulness of Ira, the poster is facing a scary task of deciding how to invest it. His goal is to retire at 20 to 25 years, but he is not sure if he needs to take a more aggressive approach to increase money or focus on stability.
The post provoked a lively debate about Reddit, and experts and amateurs weighed at the best course of action. Let’s dive deeper into the post comments.
Many Reddit members have suggested access to growth, emphasizing the power of certain cheap index funds or ETF.
“Lowbuide index funds and cold. Invest it with a slow or lump sum, congratulations! I’m like 80% in [Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)]But I have a government pension and real estate, so I have no investment bonds, “one member of Reddit suggested.
One Redditor suggested two different ETF that also holds, mentioning that they have tax advantages.
“My Ira is mostly [Vanguard Total Stock Market ETF (NYSE: VTI)] and [Vanguard Total International Stock ETF (NASDAQ: VXUS)]. Because it’s IRA, you probably don’t have to worry about taxes. I would buy VTI and Vxus and call it a day, “he wrote.
Responding to this comment, one Redditor asked, “Why VTI+Vxus when you can [Vanguard Total World Stock ETF (NYSE: VT)]?? “
“A lower cost ratio. The opportunity to divide through taxes and taxed if you deal with such things. An opportunity to choose a different US/ex-US ratio of VT if you deal with such things, “the commentator explained.
“[Vanguard S&P 500 ETF (NYSE: VOO)] would be reasonable for the stock index (or [Fidelity 500 Index Fund (FXAIX)] With loyalty), ”writes another comment.
One Redditor commented on a time frame to retire that the poster mentioned and suggested that he invested all his money into index funds.
“It’s 20-25 years old, unless you absolutely love what you do. You could take 100% to index funds and tell yourself that you retire with $ 50 or when the account reaches $ 10 million … Whatever comes first,” he said.
“Explore what the top ETF is and just throw everything into it. Example: Voo, [Vanguard Information Technology ETF (NYSE: VGT)]Vti, [Schwab U.S. Large-Cap Growth ETF (NYSE: SCHG)],, [Schwab U.S. Dividend Equity ETF (NYSE: SCHD)],, [Invesco Nasdaq 100 ETF (NASDAQ: QQQM)]… Because you are planning to withdraw in 25 years, I suggest you not put money in the bonds, “says one comment.
Several members of the R/Bogleheads Reddit Community recommended a poster for a balanced approach, combining both growth and safety.
One Redditor suggested a cleft where most of the funds are assigned to the property aimed at growing, and part is dedicated to a fixed income to provide stability.
“80% in stock index, 20% in fixed income. Forget about it until retirement, “he said.
The commentator recommended a slightly more conservative extract, with 70% in US shares, 10% in international sections and 20% in cash or monetary equivalents.
“70% in the total market of the US market market (and/or S & P 500 Index Fund). 10% in the total international stock index. 20% in cash, “the user wrote.
“The schedule, I would go simply, but since it’s already a big piece of money, you might want to protect it. I would propose at least 20% -30% to a stable bond fund, 50% of the S&P 500 fund or total market fund, and the final 20% -30% in the international fund,” another Reddigor proposed.
Lower interest rates mean that some investments will not bring what they have done in the past months, but you do not have to lose those gains. Certain real estate investments in the private market provide retail investors to use these high yield options.
