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  • how often do you guys invest

    I have set aside $16k for next year 2 ESA and 2 Roth IRA. That's all we can do for tax shelters. Then I'm just saving what I can now into taxable accounts. I moved $10k so far this year into taxable accounts. Should I leave my Roth IRA in cash capital one? Also I have $8k in excess cash now. Should I be investing like $1k a month? Or do I just let money build up and then invest it? If i invest the Roth money for next year then I need to cash it in and then put it into the Roth.
    LivingAlmostLarge Blog

  • #2
    If you have money set aside for your 2022 Roth contribution, you don't want to invest it. Either a money market or a 6-month CD, whichever is paying more (probably the money market).

    If you have other excess cash, invest that. If you routinely have excess cash each month, make a plan for a regular monthly investment.

    Personally, at the start of each month, I move $1,600 into our money market and $1,600 into our taxable brokerage account. Later in the month, if we have additional excess, I add to those positions. This is on top of funding my 401k every 2 weeks.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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    • #3
      In general terms, I invest twice monthly, with big chunks of money all moving around as needed to retirement, taxable investments, cash savings, etc. On random occasions, I'll also send extra amounts into taxable investments or savings when I've got excess unallocated cash sitting in my checking account (plus Ally also automatically pulls varying amounts into savings a few times a week, based on my checking account balance...averaging an extra ~$500/mo into savings!).

      LAL, how much free cash do you have in your monthly? If it's significant, you might consider investing the cash you have right now, then just in the last 2-3 months of the year you can save up the cash to invest all at once on 1 Jan 22 (sounds like you want to lump-sum into your Roth).
      "Praestantia per minutus" ... "Acta non verba"

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      • #4
        Every paycheck, so twice a month into retirement. Re-adjust allocations when needed and review periodically. We put in savings for IRA contributions come April. Some savings is money-market. Other stuff like stock grants, RSU's come when DH's employer gives them.

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        • #5
          Every two weeks (pay cycle) money is invested in mine and DW’s 401ks. Once per month to 529s, Roth IRAs, and brokerage account. Annually upon receipt of incentive comp to brokerage account.
          Money is better than poverty, if only for financial reasons

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          • #6
            All of our gains in the IRA get reinvested, so I guess you could say investing is ongoing. I've not put a dime into the IRA since retirement 3.5 years ago. We take draws from it monthly, but it's still making significant gains.
            Large investment purchases such as stocks, real estate, etc. are studied and really not on any sort of schedule. When a deal looks good, we do it. Been about a year since I purchased anything like this.

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            • #7
              Okay I am about to admit to hiding. I haven't ever budgeted until now. I'm terrible at it and still hate it. So I typically don't do it. Anyway now we're a bit back where we used to be so I'm tracking but I'm still very nervous that my calculations are off and probably why I hesitate to just push through the amount I predict we'll have left over every 2 weeks. I used to just send money to our investments and then save all bonuses period. So it wasn't a big deal. I could basically calculate.

              So right now i have $40k MM, $16k cash Roth, $8k property taxes and I just sent $9k to brokerage. I have another $5k in checking account. I am sending 1x/month since the refi $720 the difference in the refi to a brokerage account (robinhood) not our normal account because they let you invest by $ instead of shares. I thought I'd also really like to watch and see how that investment does compared to the arm I'm doing.

              When I looked at my cash savings I think we're at $140k. i don't mean to have so much but we have $60k ibonds, $40k MM which i'm starting to think is a bit excessive plus sink, property taxes, and now Roth savings for lump sum in january. I almost think I should invest the roth and instead draw from our $40k MM and let that be our Roth IRA savings. If it matters our expenses are large and for a 6 month EF i need $60k.
              LivingAlmostLarge Blog

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              • #8
                Originally posted by LivingAlmostLarge View Post

                So right now i have $40k MM, $16k cash Roth, $8k property taxes and I just sent $9k to brokerage. I have another $5k in checking account. I am sending 1x/month since the refi $720 the difference in the refi to a brokerage account (robinhood) not our normal account because they let you invest by $ instead of shares. I thought I'd also really like to watch and see how that investment does compared to the arm I'm doing.

                When I looked at my cash savings I think we're at $140k. i don't mean to have so much but we have $60k ibonds, $40k MM which i'm starting to think is a bit excessive plus sink, property taxes, and now Roth savings for lump sum in january. I almost think I should invest the roth and instead draw from our $40k MM and let that be our Roth IRA savings. If it matters our expenses are large and for a 6 month EF i need $60k.
                I'll admit to having a little trouble following your numbers. Do you have 16K already in your Roth in cash or is that 16K sitting in an account earmarked to go into the Roth in January? Is the 8K for property taxes sitting in a cash account until the bill is due?
                Steve

                * Despite the high cost of living, it remains very popular.
                * Why should I pay for my daughter's education when she already knows everything?
                * There are no shortcuts to anywhere worth going.

                Comment


                • #9
                  Trying to budget this year I set up sub accounts for stuff. So I have $8k in property taxes cash capital one, $16k for roth for January 2022 cash capital one account, then $40k cash in capital one another account. Property taxes are due october and home insurance in august so I have enough cash to cover both
                  LivingAlmostLarge Blog

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                  • #10
                    Why are you holding 16K for Roths? The current limit is 6K/person or 7K if 50+ so the most you'd need is 14K unless they raise the limit for 2022.
                    Steve

                    * Despite the high cost of living, it remains very popular.
                    * Why should I pay for my daughter's education when she already knows everything?
                    * There are no shortcuts to anywhere worth going.

                    Comment


                    • #11
                      So if it were me, I would suggest that you invest most of the $40k MM. You can keep the sinking funds for your Roth (maybe), taxes/insurance, etc. But beyond a reasonable amount of cash for upcoming or unexpected needs, I'd suggest sending a healthy chunk of that into investments.
                      "Praestantia per minutus" ... "Acta non verba"

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                      • #12
                        I've been ruminating on this for a while now. Ever since DH began to max out his 401K and we began to add to the "downpayment fund" (which is all cash in a savings a/c), we've been running low on our ability to contribute to our taxable every month as well.

                        I was told that we have "too much cash" and that we should invest some of it, treating our ROTH as a "emergency savings a/c" but what if the market crashes and the "emergency fund" also dries up (even if temporarily)? As of now, home ownership looks to be several years out (3 - 5 years).

                        So, what do you all think? Should at least some of that "downpayment" be in the market in VTI or VOO OR BND?

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                        • #13
                          Originally posted by Scallywag View Post
                          I was told that we have "too much cash" and that we should invest some of it, treating our ROTH as a "emergency savings a/c" but what if the market crashes and the "emergency fund" also dries up (even if temporarily)?
                          Remember that a Roth is just a basket. You can put whatever you'd like in that basket. It can be super risky stocks, it can be government bonds. It can be a money market. It's totally up to you. So just the fact that you put money into the Roth doesn't automatically mean you're taking a bunch of risk with it. If you're counting on that money as your EF or a future down payment, then you'd probably choose more conservative investments.

                          As of now, home ownership looks to be several years out (3 - 5 years).

                          So, what do you all think? Should at least some of that "downpayment" be in the market in VTI or VOO OR BND?
                          There's no right answer to that. It depends on your risk tolerance. As you know, stocks and bonds have principal risk. You could find yourself with less than you thought when you're ready to buy which could delay your purchase. Of course, you could also find that you reach your goal much faster that way. It all depends how things play out and how flexible you're willing to be with your timeline.

                          What would I do? If we weren't going to buy for 5 years, I'd probably at least invest part of the money. I don't think I'd invest it all. And I'd lean to a conservative allocation, like 30/70 or something like that.
                          Steve

                          * Despite the high cost of living, it remains very popular.
                          * Why should I pay for my daughter's education when she already knows everything?
                          * There are no shortcuts to anywhere worth going.

                          Comment


                          • #14
                            Originally posted by disneysteve View Post
                            Why are you holding 16K for Roths? The current limit is 6K/person or 7K if 50+ so the most you'd need is 14K unless they raise the limit for 2022.
                            So it's $6k roth x 2 and 2 ESA $2k x 2 = $16k cash for 2021. Then I have $40k cash Capital One MM, $60k I bonds, and $8k property taxes. I don't know I guess we have $1-2k/month to invest after set aside our property taxes and sink funds. I am not sure exactly it's still a balancing game. I sent of $11k to the brokerage account.

                            I'm not sure my DH will freak out if we empty our cash EF. Yeah I told him we have 6 months in I bonds but neither of us see that it's just something I threw in there about 3 -4 years ago as a security net. We basically treat the $40k as our EF and forget about the i bonds (which I really do). And $40k is more like 4-6 months of our expenses depending on how lean we go. It's been a long time since we've had to watch our monthly expenses so carefully. Even before we had a lot of wiggle room because our mortgage and our bare bones expenses were low. Our house now is a lot more and the property taxes keep going up fast.

                            So I don't know if I should trim back our cash position and invest monthly and even invest our Roth IRA for next year.
                            LivingAlmostLarge Blog

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                            • #15
                              Originally posted by Scallywag View Post
                              I was told that we have "too much cash" and that we should invest some of it, treating our ROTH as a "emergency savings a/c" but what if the market crashes and the "emergency fund" also dries up (even if temporarily)?
                              Check the Roth withdrawal rules, if you have enough in there to be an E-fund, and if you can discriminate contributions from growth.

                              As of now, home ownership looks to be several years out (3 - 5 years).

                              So, what do you all think? Should at least some of that "downpayment" be in the market in VTI or VOO OR BND?
                              This is tough, because it depends on interest rates. If they start to climb, BND's NAV will fall, and you won't have time for it to recover (due to higher yields).

                              A trailing stop-loss or trailing stop-limit order might mitigate that, though.

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