If you were me......

Hyderabadi · Post by **Hyderabadi** » Thu Dec 11, 2014 10:23 pm

If you were me what would you do, investment wise.

I am 45 starting from scratch(savings). I intend to save $12.5K to $50K per year for the next 20 years to give me a decent retirement amount.

I have no investment knowledge and work for myself. Appreciate your time and help.

Will answer any questions you have.

laks0 · Post by **laks0** » Thu Dec 11, 2014 10:29 pm

Hyderabadi;587789If you were me what would you do, investment wise.

I am 45 starting from scratch(savings). I intend to save $12.5K to $50K per year for the next 20 years to give me a decent retirement amount.

I have no investment knowledge and work for myself. Appreciate your time and help.

Will answer any questions you have.

self employed? See if you can contribute to a 401k or open an IRA/Roth accounts.

Hyderabadi · Post by **Hyderabadi** » Thu Dec 11, 2014 11:02 pm

laks0;587790self employed? See if you can contribute to a 401k or open an IRA/Roth accounts.

ok, but what do I do after :)

Desi2return · Post by **Desi2return** » Thu Dec 11, 2014 11:12 pm

Hyd: I am not in anyway an investment expert so...what I know is very little.

To save 50K you have to earn atleast 3X more....2X will go for your living expenses and taxes and 1X will go towards savings. So what can you do to increase your earnings? Investment advice will come into picture only when you are able to save

As far as investment is concerned lot of it will depend on your time frame and risk tolerance. If you do not need that 50K savings per year for another 20 years, please see Desi's strategies from previous threads. He has contributed a lot in this area. AAP and DCA strategies comes to my mind. Also check out RRK's threads on this topic regarding how you can invest between Bonds, Stocks (Mutual Funds) and International funds

Bottomline: Figure out ways to increase earnings; cut down spending drastically; invest based on AAP and DCA strategies

Note: As far as opening an account check out SEP IRA for small business owners

RBee · Post by **RBee** » Thu Dec 11, 2014 11:19 pm

I am no ivestment expert either but DCA, discipline, and some amount of risk taking are paramount in increasing net worth..

Compartmentalize your needs and your saving potential for next 5,10,15,20 year horizon..Like what are your immediate needs for next 5 years, what portion of money need not be touched for another 10 years and so on..

Since you are self employed, use SEP IRA. Ask your wife to contribute to expenses and you to savings or viceversa..As far as holdings in SEP IRA, Vanguard funds are good to invest in ..

Even if you declare bankruptcy, IRS cannot count on your house/401K and other immovable investments, so invest in those..

Hope Lakshya and Desi Sir pitch in too..

Lakshya · Post by **Lakshya** » Thu Dec 11, 2014 11:19 pm

HYD

I would say read this book. ( I have not read it)

http://www.amazon.com/dp/0981454240/?tag=oblivbookblurb-20

Just to give you a rough idea. I would say keep it simple. I would first open vanguard account and will fund its money mkt acct. From that you can start investing in various VG funds or ETF via DCA. But that part comes latter on.

BTW Whatever you do wait till Jan for large sum to put in any Funds.

Hyderabadi · Post by **Hyderabadi** » Thu Dec 11, 2014 11:27 pm

RBee;587798I am no ivestment expert either but DCA, discipline, and some amount of risk taking are paramount in increasing net worth..

Compartmentalize your needs and your saving potential for next 5,10,15,20 year horizon..Like what are your immediate needs for next 5 years, what portion of money need not be touched for another 10 years and so on..

Since you are self employed, use SEP IRA. Ask your wife to contribute to expenses and you to savings or viceversa..As far as holdings in SEP IRA, Vanguard funds are good to invest in ..

Even if you declare bankruptcy, IRS cannot count on your house/401K and other immovable investments, so invest in those..

Hope Lakshya and Desi Sir pitch in too..

Co incidentally I work as an independent contractor at Vanguard :)

Hyderabadi · Post by **Hyderabadi** » Thu Dec 11, 2014 11:36 pm

Lakshya;587799HYD

I would say read this book. ( I have not read it)

http://www.amazon.com/dp/0981454240/?tag=oblivbookblurb-20

Just to give you a rough idea. I would say keep it simple. I would first open vanguard account and will fund its money mkt acct. From that you can start investing in various VG funds or ETF via DCA. But that part comes latter on.

BTW Whatever you do wait till Jan for large sum to put in any Funds.

I have no large sums :)

After ramping up this year, I am targeted to make $160K next year and intend to generate another $40-$50K from a new business venture.

So out of $200K I am thinking I will pay $50K to Sam, 50K towards investment and 100K to live life and hope this model will survive another 20 years. My CPA is very keen to help me :) I will take his help to a large extent in terms of some planning but investment planning, I do want to become aware/knowledgeable of my money.

I am looking for: how would you divide the money and where would you invest. ( peel the banana, I will chew) I intend learning to peel the banana too as I go along.

NoChaos · Post by **NoChaos** » Thu Dec 11, 2014 11:51 pm

Hyderabadi;587789If you were me what would you do, investment wise....next 20 years to give me a decent retirement amount...
Will answer any questions you have.

decent

Without knowing above two, it's not possible for anyone to answer you question.

dixit · Post by **dixit** » Fri Dec 12, 2014 12:14 am

Hyd,

If you have your own company and have income above and beyond what you need for your day-to-day expenses then you should research on setting up a 'Defined Benefits Plan' (or Defined Contribution Plan).

Advantage is that unlike the limits on 401k or IRA, there are no limits for this plan. You can defer the taxes on a major chunk of your taxable income and put aside for retirement.

Of course, this still doesn't answer the question of how should you invest this money.