Advice for someone with common sense

[jbc]

Hey all:

As the title says, I think I have a good amount of common sense; however, I am short on non-basic personal finance knowledge. I am in a good financial situation but know that I am probably losing a lot of money because of my lack of knowledge. I don't mind studying up on things (or paying someone else for advice), but I am a little unsure where to go from here.

Here's my situation:

I'm 29 years old, and make a good salary (about $150K)
I own my house (for about 2 years)
I have no debt besides the house
I have ~$60K in my last job's 401k
I have ~$28K in my current job's 401k
I have ~$20K in my IRA (can't contribute anymore b/c of income)
I have ~$45K cash in emergency fund (I am on the paranoid/conservative side)
I have ~$15K in company stock (via ESPP)
I have ~$10K in individual stocks
I have ~$7K in an old job's 401k

I max out my company 401k and ESPP ($14K/year and 10% income respectively).

Given this information, what direction would you point me in? What should I be looking out for? I am most concerned with my money not being appropriately diversified, and not actively managing my holdings to maximize return. I basically just choose the funds to contribute to, and don't monitor them closely afterward.

Thanks for reading if you got this far. And, I appreciate any thoughts and/or advice.

[Sniper]

Quick questions that came to mind:
1. Are you single?
2. 115K divided between your retirement accounts, but how are these funds allocated?
3. 45K emergency fund?... is this just sitting in your checking account?
4. 10K in individual stocks... how did you select these stocks (how many?), and how are you managing this port?

[jbc]

[ QUOTE ]
Quick questions that came to mind:
1. Are you single?
2. 115K divided between your retirement accounts, but how are these funds allocated?
3. 45K emergency fund?... is this just sitting in your checking account?
4. 10K in individual stocks... how did you select these stocks (how many?), and how are you managing this port?

[/ QUOTE ]

Hey Sniper:

Your avatar rocks, thanks for responding.

1) Yes single. I live with my girlfriend and support her (she is a student and works part time). I pay all the bills and fund her IRA max each year.

2) I have a family member who is a financial consultant (CFP I believe). She looked over my holdings about 2 years ago and helped me divvy things up. They are pretty spread out and I wouldn't mind consolidating these. I am not that close with this family member and don't want to involve her too much in my long term plans.

3) Emergency fund is in an ING direct account. Have had this account for 3-4 years and also have my mortgage (ARM) through them. It pays around 3.8-4%.

4) My relative picked these for me. I've held them about a year and they are basically dead even (5 individual stocks).

I am going to continue maxing my ESPP, 401k, and my girlfriend's IRA. I have pretty cheap tastes and a low cost of living. Thus, I have extra money that I'd like to put into something stable (mutual fund or something). Something that I could deposit into every month or whenever.

I'm also interested in getting into a routine of reviewing my fund allocations on a regular basis (quarterly? yearly?).

Thanks for any other info that you can offer. Any kind of book suggestions would also be good. Unfortunately, when I peruse Barnes and Noble, a lot of the financial books are either too complicated or are aimed for the 'get out of debt/buy a house' set. I think I am in the middle of these. I am smart with my money but am probably missing opportunities left and right because I don't manage it closely enough.

[Reef]

I don't have anything to contribute in this thread. Just curious how much is in your gf's IRA, and what happens to it if you two split.

[jbc]

[ QUOTE ]
I don't have anything to contribute in this thread. Just curious how much is in your gf's IRA, and what happens to it if you two split.

[/ QUOTE ]

I believe its around 15K. If we split, she would keep it. We've been together quite a while.

[Recliner]

jbc,

I'm going to throw this stuff out there because someone has to. Please don't take offense.

How long is "quite a while?" Are you planning on marrying her?
If not, or if you don't know, is it best for your relationship for her to be financially dependant on you? You pay her bills, give her money for her IRA and I'd imagine buy her lots of crap. Without knowing the background of your relationship you sound like a sugar daddy.

Also, with you subsidizing her lifestyle, has she developed the skills of being able to support herself? Would she be ok if your salary got cut by 2/3rds for whatever reason? If that happened would she split because that can't provide the lifestyle she desires?

I'd also like to know how much school and her bills are.

Hope I wasn't an [censored], but it is likely better for you if someone brings these questions up.

[Paluka]

[ QUOTE ]
jbc,

I'm going to throw this stuff out there because someone has to. Please don't take offense.

How long is "quite a while?" Are you planning on marrying her?
If not, or if you don't know, is it best for your relationship for her to be financially dependant on you? You pay her bills, give her money for her IRA and I'd imagine buy her lots of crap. Without knowing the background of your relationship you sound like a sugar daddy.

Also, with you subsidizing her lifestyle, has she developed the skills of being able to support herself? Would she be ok if your salary got cut by 2/3rds for whatever reason? If that happened would she split because that can't provide the lifestyle she desires?

I'd also like to know how much school and her bills are.

Hope I wasn't an [censored], but it is likely better for you if someone brings these questions up.

[/ QUOTE ]

For his sake he better hope things don't work out. If things go well, he could end up with children, and from your other posts on this forum I've now realized what a horrible drag on someone's lifelong quest to become a millionaire children can be.

[shagjohn]

In addition to what jbc mentioned, depending on what state you're in and how long you've been living together, you may no longer be 'single'. I don't remember the timeframes, but there are such things as common law marriages, and if things go sour and there's any legal action, the state may treat it as if you were married. Ideally none of this matters, and I wish you both the best, but it's usually good to be aware of those sorts of things.

[Sniper]

[ QUOTE ]
[ QUOTE ]
2. 115K divided between your retirement accounts, but how are these funds allocated?

[/ QUOTE ]
2) I have a family member who is a financial consultant (CFP I believe). She looked over my holdings about 2 years ago and helped me divvy things up. They are pretty spread out and I wouldn't mind consolidating these. I am not that close with this family member and don't want to involve her too much in my long term plans.

[/ QUOTE ]

If you list the funds you are currently allocated to (and the other choices you have within each 401K) it might help a conversation on allocation/consolidation.


[ QUOTE ]
[ QUOTE ]
3. 45K emergency fund?... is this just sitting in your checking account?

[/ QUOTE ]
3) Emergency fund is in an ING direct account. Have had this account for 3-4 years and also have my mortgage (ARM) through them. It pays around 3.8-4%.

[/ QUOTE ]

45K is a significant % for your age sitting in an ING savings account. Its likely you could shift some of this to a higher return long term investment, that would still be readily available for any short term crisis. Is there any forseen crisis, beyond a few month's living expenses in the event of job loss that you see this being used for? (I assume you have good health insurance)

[ QUOTE ]
[ QUOTE ]
4) My relative picked these for me. I've held them about a year and they are basically dead even (5 individual stocks).

[/ QUOTE ]
4. 10K in individual stocks... how did you select these stocks (how many?), and how are you managing this port?

[/ QUOTE ]

If you provide more info on the alloaction of your funds within your retirement accounts, it will be easier to make suggestions on how to better utilize your taxable account.

[ QUOTE ]
I am going to continue maxing my ESPP, 401k, and my girlfriend's IRA. I have pretty cheap tastes and a low cost of living. Thus, I have extra money that I'd like to put into something stable (mutual fund or something). Something that I could deposit into every month or whenever.


[/ QUOTE ]

You are on the right track with getting funds into accounts and saving, that's the first step!

Put the excess funds you don't know what to do with yet, into your regular brokerage account, till you figure out how to allocate it.

[ QUOTE ]
I'm also interested in getting into a routine of reviewing my fund allocations on a regular basis (quarterly? yearly?).

[/ QUOTE ]

You definately should do a periodic review and reallocation.

[ QUOTE ]
Any kind of book suggestions would also be good. Unfortunately, when I peruse Barnes and Noble, a lot of the financial books are either too complicated or are aimed for the 'get out of debt/buy a house' set. I think I am in the middle of these.

[/ QUOTE ]

I'll give some thought to an intermediate level book that would specifically fit what you are looking for. None come to mind off the top of my head at the moment.

[Lunger]

[ QUOTE ]

I have ~$60K in my last job's 401k
I have ~$20K in my IRA (can't contribute anymore b/c of income)
I have ~$10K in individual stocks
I have ~$7K in an old job's 401k

[/ QUOTE ]
You may want to look into rolling over those old 401k accounts into one rollover IRA. Your investment choices may be limited in the old 401k to a few funds and this would increase your options. I am not sure where your existing IRA and investment account are at, but if they are at a discount brokerage (like TD Waterhouse or E-Trade etc.) you may want to consolidate all your accounts to the same company. This may save you some money by not having to pay account maintenance fees to all the different places you have your money. Plus, by having 100k at one place, you may get better pricing on trades due to your larger balance. Also, geting just one statement for all of these accounts monthly/quarterly instead of four may make it easier to manage.

[ QUOTE ]

I max out my company 401k and ESPP ($14K/year and 10% income respectively).


[/ QUOTE ]

The max for 401k went up this year to $15k so you may need to adjust your contribution if you haven't done so already.

[ QUOTE ]

I'm also interested in getting into a routine of reviewing my fund allocations on a regular basis (quarterly? yearly?).

[/ QUOTE ]

If you haven't already, start using some financial software (MS Money or Quicken) to help keep track of it all. It should be very helpful when looking at the mix in your portfolio especially across so many accounts.